TEXT AND NOTABLE POINTS FROM PRESS CONFERENCE ON FEBRUARY 14
Recent power interruptions spanning Nigeria are connected to the inability of prominent entities within the Nigerian Electricity Supply Industry (NESI) to settle historical and present debts. This has resulted in a dysfunctional scenario where Gas Companies (GasCos) withhold gas provisions from Generation Companies (GenCOs).
A notable hurdle is the absence of a tariff structure that accurately reflects costs, impeding Distribution Companies (DISCOs) from achieving revenue goals and making investments to mitigate technical, commercial, and collection losses (ATC&C).
Presently, a substantial NGN1.6 trillion deficit exists in wholesale tariffs, with an industry-wide average ATC&C loss of 48%, signifying that nearly half of the electricity generated remains unpaid for due to technical impediments, theft, and inefficiencies in billing and collection procedures.
In collaboration with the Ministry of Finance, Budget, and Economic Planning, alongside the office of the Special Adviser on Energy to the President, active measures are being taken to address the significant outstanding debts owed to both GenCOs and gas suppliers through a combination of financial injections and guaranteed debt instruments.
Furthermore, alliances with the Minister of State for Petroleum Resources (Gas) are being cultivated to formalize gas provision contracts for GenCOs, with the objective of stabilizing pricing in local currency for domestic gas-to-power supply.
Efforts are underway to modernize aging infrastructure, enhance capacity, and implement advanced technologies through the Siemens-supported Presidential Power Initiative (PPI). Endeavors such as the finalization of financing arrangements for the 40MW Kashimbila Hydro Power Plant in Taraba state and the completion of the 700MW Zungeru Hydro Electricity Power Plant in Niger State are progressing.
Focus is directed towards enhancing the operational efficiency of NIPP power plants under the Niger Delta Power Holding Company to a minimum of 50%. Prioritizing pivotal power initiatives like the Siemens Project, which aims to bolster transmission capacity, remains paramount.
Initiatives to revamp and fortify existing transmission infrastructure, including the upgrading of substations and power lines, are underway. Intervention projects funded by multilateral development partners, such as the World Bank, AfDB, and JICA, are being expedited to address pressing transmission challenges.
Concerted regulatory efforts have led to substantial penalties for non-compliant DISCOs and reimbursements to customers who were overcharged, bolstering reliability and resilience in our electricity supply infrastructure. We remain steadfast in our commitment to enhancing communication and collectively overcoming challenges to ensure the delivery of dependable and accessible electricity to every corner of the nation.
