A report by French Development Agency (AFD) had also noted that the liquidity losses in Nigeria’s power sector have been growing consistently by N474 billion yearly or N1.3 billion daily. In eight years, the liquidity crisis in the sector, therefore, hovers around N3.7 trillion.
Seen as a sector where more money means less power, donor agencies like AFD said it had provided about €2 billion to support the sector.
Between 2015 and 2018, the Obama’s Power Africa, the USAID-initiative has injected about $1 billion to revive the power sector. The World Bank said it has aided the country’s power sector with the $1.25 billion within two years.
While expectations in the $2.3 billion Nigerian/German deal through Siemen’s has not sparked optimism for the sector, the Central Bank of Nigeria (CBN) is currently spending about N1.5 trillion as loan in the sector.
The CBN interventions include, Power and Aviation Intervention Fund (PAIF), hovering around N300 billion, Nigerian Electricity Market Stabilisation Facility (NEMSF) at about N213 billion, N140 billion Solar Connection Intervention Facility, over N600 billion tariff shortfall intervention as well as a recent N120 billion intervention designed for mass metering, among others.
While the Federal Government had said N30 billion was paid daily to subsidy electricity after the figure reduced from N50 billion on the backdrop of the introduction of SBT, the government noted that subsidy on electricity tariff is about N1.0 trillion between 2019 and 2021.
Zainab told International Monetary Fund in a virtual meeting over the weekend that the era of subsidy for power consumers has now ended, meaning that consumers would witness progressive increase in tariff through 2025 going by the design of the SBT.
Recall that in 2016, the Federal Government created a N701 billion payment assurance guarantee through the CBN for NBET as the Japanese government staked over 1.3 billion yen, an equivalent of $11 million and N2.2 billion, to the development of Nigeria’s power sector.
While NBET had said Nigerians consumed about N720 billion worth of electricity yearly, the figure translates to N5.7 trillion in eight years. When added to the N1.3 trillion the Federal Government spent on similar purpose in recent times, the payment for electricity bills would have stood at N7 trillion.
With the rising tariff, the claims being made by the different agencies as explanation for worsening state of supply are not adding up.
Spokesperson for TCN Ndidi Mba had said: “A summary of the power generating profiles in the last two months, for instance, clearly shows that 14 gas-powered stations were either not generating at all or had limited generation at various times within the period, further depleting the quantum of power generation available for transmission into the grid on a daily basis.
“Power generating stations in this category include: Omotosho units five and six; Olorunsogo units three, four and six; Omoku units three and six; Omotosho NIPP units three and four; Delta units 15, 17, and 18; Afam VI units 11 and 12; Olorunsogo NIPP unit three; Ihovbor NIPP unit two; Sapele Steam unit three; Sapele NIPP unit three; Odukpani NIPP units one and three, and Okpai units 11, 12 and 18.”
She noted that Jebba Hydro and Shiroro Power Generating Stations were either out or had limited generation, causing additional loss of 232MW from the grid, while other power generating plants such as Omotosho units three and four; Olorunsogo units one; Delta units 10 & 20; Afam VI unit 13; Ihovbor NIPP units 4; Geregu NIPP units 22 and 23 and Odukpani NIPP units 2, 4 and 5, have also been out, either on fault or for scheduled maintenance, causing a further loss of about 3,180MW from the grid.
Statistic obtained by The Guardian from Association of Power Generation Companies (APGC) showed that average generation capacity stood at 4,81.18MW for January, it was 4,457.22 in February and 3,687.67 currently. Of the generation, 4,263.70 was stranded in January, 4317.39 in February and 1,739.74 in the current.
The data from 2015 through 2022 showed that about N1.6 trillion losses were incurred by the investment due to the inability of transmission infrastructure to pick adequate load.
The Executive Secretary of the association, Dr. Joy Ogaji stated that about 80 per cent of power plants in the country use gas-fired turbines, adding that the GenCos had consistently dealt with unending gas-related challenges, which inhibit optimal generation.
“Since 2013, when the power sector was partially privatised till date, weak and inadequate infrastructure (transmission and distribution) have continued to render inconsequential, a significant portion of the generation capacities recovered or added by GenCos through huge investments done by them to increase their respective generation capacities. While the owners of the GenCos invested committedly and increased generation capacity up to 13,000MW across the country, no corresponding investment and improvement was made at the transmission and distribution ends.
“The result was the significant stranded capacity of GenCos, which ironically, Nigerians are in dire need of but cannot get. Given that capacity utilisation in any market, is often used as a measure of productive efficiency, decisions about investments in power generating capacity depend on expected returns and costs,” she stated.
A legal practitioner and consumer advocate in the Nigerian Electricity Supply Industry, Kunle Olubiyo noted that claims by the government on payment of electricity subsidy may be erroneous, stressing that, “it is the consumers who are been short-changed by estimated billing for energy that they didn’t consume.”
According to him, the end users have been subsidising electricity market by paying for products that are not delivered or pay for the same amount for electricity even when they don’t get supply in months.
Olubiyo said, there have been 500 per cent increase in billing from October 2020, which end users did not enjoy in the real sense, especially the commensurate number of hours of power supply that they are supposed to get based on the contract of Service Reflective Tariff.
Pointing out some tariff faults, Olubiyo said the foreign exchange and gas component of the tariff would continue to impact negatively on prices of electricity unless there are deliberate efforts to clean up the sector wide inefficiencies.
“Moving forward, Nigerian has the option of cleaning up several production cost and tariff inefficiencies. The easiest way to achieve this is by allowing gas to power generation companies, markets players, market participants and all those involved in the day to day business of production of gas, key players in electricity market value chain to have unfettered access to official exchange rate window, which will go a long way in reducing market shortfalls and Induced tariff shortfalls,” he said.
SOURCE:THEGUARDIAN
