• GenCos lose N1.6tr to stranded electricity as liquidity hits N3.7tr
• Grid plunges, Nigerians pay N7tr for darkness, govt removes subsidy
• $2.3b Siemens deal, Buhari’s borrowings, others fail to revive sector
If the projection of the World Bank is anything to take seriously, Nigerian businesses may have lost nothing less than $232 billion (N96.4 trillion) in the last eight years that the Federal Government and operators in the sector dilly-dally on making it perform.
While government ministers in charge of power, the Transmission Company of Nigeria (TCN) and Nigerian Bulk Electricity Trading Company (NBET) trade fresh blame with the Distribution Companies (DisCos) and the Generation Companies (GenCos), industries and homes across the country are hit by total darkness.
This is despite the continuous tariff increase designed under the Service Based Tariff (SBT), which the minister of finance, budget and national planning, Zainab Ahmed, admitted is being implemented.
Meanwhile, there are indications that the liquidity crisis, which has trapped the sector from fresh investment, has increased to about N3.7 trillion.
The situation in the electricity sector worsened of late, with the 11 distribution companies issuing notes to end-users blaming the TCN of not supplying enough energy to dispatch.
The TCN fired back on the GenCos, stating that 14 power generation plants were down across the country. NBET in a sharp twist blamed DisCos saying, “the DisCos have reneged on all performance agreements and held the sector in a fix.”
But the GenCos, at a media briefing yesterday, insisted that illiquidity caused by the huge sums owed GenCos by NBET “more than ever before continued to frustrate the GenCos and keep them incapable of meeting their obligations which are extremely necessary to keep their power plants running and make capacities available.”
While this is on, the Federal Government is borrowing more money to pump into it despite that stakeholders have warmed that the sector is structurally defective, requiring fixing foundational issues, including getting the sector’s regulator; Nigerian Electricity Regulatory Commission (NERC) on the right track before expecting results in the industry. Ahmed had disclosed that the Federal Government would be spending nothing less than $2.7 billion on power infrastructure.
World Bank’s Practice Manager, West and Central Africa Energy, Ashish Khanna, had said the country’s power sector has not kept up with demand or provides reliable supply to existing customers.
Khanna went further to disclose that businesses in Nigeria lose about $29bn yearly because of unreliable electricity. That figure, in the last eight years that the sector was privatised, stands at about $232 billion. Converted to naira based on the country’s current exchange, that amounted to N96.4 trillion. The losses near double the N76 trillion cumulative national budget under Buhari’s government from 2015 to 2022.