House to Investigate N7tn Interventions in Power Sector since Privatisation

•Governors hail signing of Electricity Act 2023 into law 

•We’ll integrate renewable energy into power architecture, says ECN boss

Chuks Okocha, Adedayo Akinwale and Sunday Aborisade in Abuja

The House of Representatives, yesterday, resolved to investigate all the financial interventions, which amounted to over N7 trillion, in the power sector since its privatisation to ascertain whether the funds were judiciously utilised.

The resolution came as Chairman of the Nigeria Governors Forum (NGF) and Governor of Kwara State, AbdulRahman AbdulRazaq, commended the signing of the Electricity Act 2023 into law. AbdulRazaq, who also confirmed that the federal government had invested over N7 trillion in electricity, described the new law as a significant milestone towards stable and efficient electricity supply in Nigeria.

Equally yesterday, the newly appointed Director General of the Energy Commission of Nigeria (ECN), Dr. Mustapha Abdullahi, promised that his agency would work towards the full integration of renewable and alternative energy into the country’s power architecture.

The resolution of the House of Representatives was sequel to the adoption of a motion moved at yesterday’s plenary by Hon.  Ademorin Kuye.

Moving the motion, Kuye recalled that the federal government in 2013, unbundled the Power Holding Company of Nigeria (PHCN), and sold 18 utility firms to private investors, resulting in six generation companies (GenCos) and 11 distribution companies (DisCos).

Kuye added that the privatisation of Nigeria’s power sector was necessary due to the failure of the defunct PHCN to attract investments, but the industry had not meet Nigerians expectation.

He stressed that the federal government had spent over N7 trillion on direct interventions in the power sector, despite privatising the industry, since November 2013. These included, according to him, the Presidential Power Initiative, a strategic approach to address Nigeria’s unreliable and inadequate electricity supply.

He noted that but for the interventions by the Central Bank of Nigeria (CBN) of over N1.3 trillion, the country’s power sector would have collapsed due to liquidity, poor performance, suppressed tariffs, lack of infrastructure at the transmission and distribution ends, and weak regulations and oversight.

Kuye noted that since the privatisation, the power sector had undergone various financial interventions, including those from International donor agencies. He said the World Bank had approved an International Development Association (IDA) credit of $486 million aimed at upgrading the wheeling capacity of the Nigerian electricity transmission grid, including the rehabilitation and expansion of transmission substations across Nigeria.

He added that the African Development Bank (AfDB) provided a facility of $300 million to the TCN for the purpose of expansion and rehabilitation of existing northern corridor transmission lines, particularly in the North-west and North-central regions.

Kuye noted that the French Development Agency also provided a facility of $170 million for transmission infrastructure expansion around Abuja metropolis and neighbouring states.

The lawmaker added that Japan International Cooperation Agency (JICA) provided a facility of $238 million for transmission infrastructure expansion within the South-west region of Nigeria, among others.

He expressed concern that revenue generation and collection had been the major challenge of the power sector, as DisCos lamented revenue shortfalls attributed to low electricity tariff or electricity revenue that might be accruing to the wrong accounts.

Kuye also lamented that out of the 11 DisCos in Nigeria, banks had taken over six, which he listed as the AEDC, KADECO, KEDCO, BEDC, IBEDC and PHEDC, due to poor financial performance and management.

He stressed that the Aggregate Technical and Commercial Collection (ATC&C) loss was an actual measure of the performance of a power distribution system as it includes both technical losses and commercial losses. He said it showed the gap between input energy into the system and the units for which the payment was collected;

The lawmaker said improved ATC&C loss reduction would be achieved if DisCos adopted a combination of other strategies that would ensure reduction in technical and commercial losses in addition to aggressive deployment of meter assets.

Kuye noted that the Nigeria Electricity Supply Industry was facing threat due to the poor performance and transparency of DisCos and NERC’s ability to sanction erring stakeholders.

He expressed worry that the National Power Grid had collapsed over seven times this year, despite the huge investment in the power sector, which he said explained the persistent electricity shortage in the country.

The House mandated “the Committee on Power to investigate all the financial interventions in the power sector since privatisation with a view to determine whether the funds were judiciously utilised and report back within six weeks for further legislative action”.

NGF Hails Signing of Electricity Act 2023 into Law

The NGF chairman, AbdulRahman AbdulRazaq, made the commendation while speaking at a seminar organised by the forum and the United Kingdom Nigeria Infrastructure Advisory Facility (UKNIAF) in Abuja

AbdulRazaq said the federal government had invested over N7 trillion in the generation of electricity in Nigeria.

According to him, “If you look at what is happening today in Nigeria, the government has injected about N7 trillion in the electricity market. It is expected that any intervention is an input into production. And being an input, what that means is that the output must exceed the input.”

AbdulRazaq added, “I expect that everybody feels frustrated that the power industry is not doing well, that UKNIAF will sit down and analyse the advice they have given, the consultation that they have given to previous governments that have not worked, what are the hitches? Where have we got it wrong?

“And from there we begin to leverage on those solutions and go ahead with the new Act that has given privileges to state governments to own electricity.

“We have been seeing so many organisations working tangentially with one another.”

Director General of NGF, Asishana Okauru, in his contribution at the seminar, said the “Electricity Act 2023 represents a significant milestone towards achieving a stable, reliable, and efficient electricity supply for our people.

“It provides a legal framework for private sector participation in the generation, transmission, and distribution of electricity.”

According to Okauru, “We are often told that the amendment of the constitution and the signing of the Electricity Act 2023 open the sub-national electricity market to stakeholders and players in the industry. This makes perfect sense, but to laymen and, perhaps, a majority of the populace, particularly those residents in the states, this is mere jargon.

‘”Our task, therefore, is to facilitate the simplifying of this very complex and highly technical endeavour in a way that both the government and the governed will fully appreciate what is happening, how it should happen and the benefits of it all.”

He stressed, “On our part at the NGF, we plan to unveil a support effort that will caption the Nigeria Sub-National Electricity Markets Support Programme (NSEMSP).

“This is going to be a flagship project of the forum and it will be designed to facilitate the development of sustainable, competitive and diversified sub-national electricity markets in the country.”

In his comments, the leader of UKNIFA, Mr Gill Atkinson, pledged the cooperation and support of the United Kingdom government and other international organisations to find solutions to electricity crisis is Nigeria.

We’ll Integrate Renewable Energy into Power Architecture, Says ECN Boss

The newly appointed Director General of ECN, Dr. Mustapha Abdullahi, promised that his agency would work towards the full integration of renewable and alternative energy into the Nigerian power architecture. Abdullahi stated this yesterday, when he officially assumed office in Abuja.

He pledged to vigorously drive President Bola Tinubu’s energy transition plan.

The director-general, who addressed his staff at the commission’s head office, also expressed his readiness to look into the welfare issues with a view to boosting staff morale.

The energy expert described the commission as important but underrated and provided some insight into his agenda for the agency.

Abdullahi said, “I would like to share my vision of the direction the commission will be heading under my stewardship, with the dedicated support of our staff and stakeholders.

“We will ensure the integration of the renewable and alternative energy policy structure into the mainstream National Energy Architecture.

“We will also ensure the immediate facilitation of the actualisation of the Energy Transition Plan.

“We will facilitate research and development funding and partnership initiatives in the energy sector.”

Abdullahi also pledged to ensure an improved welfare consideration for staff of the commission that would be commensurate with standards in the energy sector.

The new ECN director-general also spoke on plans to collaborate with stakeholders, including the subnational bodies.

“With the new legislation in place, there is room for a larger scope of operation and cooperation with the states for deepened economic development built on a robust energy sector for the benefit of our people,” he added.

The acting General Manager, Abdulazeez Elama, had while handing over commended President Bola Tinubu for putting the agency in the hands of a tested professional in the energy sector.