Eight years after privatisation of the power, the Federal Government, through the Central Bank of Nigeria (CBN), has pumped over N2 trillion into the sector to save it from collapse due to liquidity.
Privatised on November 1, 2013, the sector has been engulfed in financial crisis, even as industry statistics put the financial liquidity in the power sector at around N4 trillion.
Experts in the sector have noted that the several interventions initiated both by the CBN and Federal Government are the the lifelines that helped the sector evade collapse of the 2013 electricity privatisation exercise.
Recall that the CBN had launched the Power and Aviation Intervention Fund (PAIF), hovering at about N300 billion, Nigerian Electricity Market Stabilisation Facility (NEMSF) at about N213 billion, N140 billion Solar Connection Intervention Facility, over N600 billion tariff shortfall intervention and recently, N120 billion intervention designed for mass metering among others.
While the Federal Government released N600 billion to enable the sector to bridge its shortfall in the payment of monthly invoices by key stakeholders in the sector, another N701 billion CBN facility was deployed in March 2017 as Power Assurance Guarantee and in 2020 the CBN directed Deposit Money Banks to take charge of the collection of electricity bill payments.
According to a circular signed by the Director of Banking Supervision, Hassan Bello, recommendations of the Power Sector Coordination Working Group to improve payment discipline in the Nigerian Electricity Supply Industry (NESI) gave rise to the interventions, which are already paying off.
For instance, the Nigerian Electricity Regulatory Commission (NERC) revealed there had been an improvement in the revenue generated by the power sector since late 2020, adding that consumers now pay over 78 per cent of their electricity bills to electricity distribution companies.
Also, besides bridging the metering gap, the CBN revealed that the interventions equally led to the recovery of power generation capacity of about 1,200 megawatts and allowed DisCos to carry out projected capex through issuance of letters of credit (LCs) for the purchase of over 704,928 meters; rehabilitation of over 332 kilometres (km) of 11 kilovolt (kV) lines and 130km of 0.45KV lines; 511 transformers purchased and installed and construction of 56 new distribution substations as well as acquisition of a mobile injection substation.
Speaking to newsmen, the President, Nigeria Consumer Protection Network, Kunle Olubiyo, who commended the schemes and financial interventions by the apex bank and the Federal Government, however, stressed the need for an urgent review, especially with supporting policies that would drive holistic results from the programmes.
A former Chairman of NERC, Sam Amadi, who said the intervention remained critical, noted that the commission was relevant to the success of the financial intervention.
He said: “We are not hearing about all the monies from the regulator and that is worrisome. It is the regulator who should be speaking about funding for the sector because it has the capacity to regulate expenditure and ensure it goes to what is relevant and prudent.