A Review of the Nigerian Energy Industry

Power investors jittery as performance ultimatum approaches

Power Transmission25 June 2014, Abuja – Investors in the privatised power firms and the Federal Government may be heading for a showdown as the deadline for the improvement of electricity supply to consumers ends at the end of this month without much progress being made.

The Federal Government had in January this year given marching orders to the investors and key operators in the sector to ensure that there was visible improvement in the supply of electricity across the country by June.

The directive, which came from President Goodluck Jonathan, was announced by the Minister of Power, Prof. Chinedu Nebo, during the inauguration of the Board Chairman of the Transmission Company of Nigeria, Mr. Ibrahim Waziri.

The recent reversal of the moderate gains in power generation and supply is said to be causing tension in the sector, as operators do not have a clear idea of what the Federal Government’s actions will be, especially for firms that will be found wanting.

The Special Adviser to the Minister of Power on Power Systems, Mr. Jonathan Ogbonna, confirmed to our correspondent on the telephone that the ministry would by the end of the deadline review the situation on the ground to determine why the firms had not been able to improve electricity supply to consumers.

He said, “If it is discovered that they (the firms) have limitations, the ministry may express some level of understanding. Otherwise, any firms found wanting will be called to account.

“Corrective measures will be proffered; but in proffering the corrective measures, it will be determined whether or not to wield the stick.”

Ogbonna maintained that the ministry was interested in ascertaining the reasons for the non-performance of some players in the sector so that lessons would be learnt from such cases for the needed adjustment to be made.

Admitting that the transition stage should be a learning curve for power firms, he stressed that the ministry would ensure that adjustments were made based on findings, adding that “the situation we have has not been the best.”

On the planned assessment, he said the ministry would coordinate all the activities, with the Nigerian Electricity Regulatory Commission driving the entire process.

Nebo had said, “I wish to charge all the principal sector players to commit to ensuring that power supply to our customers is significantly and visibly improved by June this year as directed by Mr. President.

“Much is expected of us all and the entire nation is waiting for us. Government will no longer tolerate any excuse of non-performance from any of the sector players, particularly our new private sector partners.”

With respect to the new owners of the legacy assets, Nebo said the ministry and other agencies of government would invoke all relevant clauses in the agreements divesting the government’s ownership in the electricity generation and distribution companies to the new investors.

“Nigerians must, I repeat, must enjoy the dividends of the reform programme and no one will be allowed to frustrate this vision of Mr. President,” he added.

The minister had decried the rising incidence of system collapse, high transmission loss factor, poor rate of project delivery and general lack of prudence in financial management in the companies, saying, “On the commercial side, the ministry has been concerned with a lack of business approach to decision making and a general malaise emanating from its origin of public ownership.”


– The Punch

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