Nigeria: Reps halt N309bn bond for electricity market, demand answers on CBN bailout

…Members say NERC has failed electricity consumers
Oscarline Onwuemenyi
30 April 2016, Sweetcrude, Abuja – The Nigerian Electricity sector is in for more rough times after the House of Representatives, yesterday, put on hold plans to raise a federal government secured bond of N309 billion to finance the shortfall in the electricity market.

*Nigeria's House of Representatives.

*Nigeria’s House of Representatives.

This followed a motion moved by Hon. Edward Pwajok, in which the lower chamber also directed the Federal Ministry of Power, Works and Housing, the Nigerian Electricity Regulatory Commission (NERC), and the Nigerian Bulk Electricity Trading (NBET) to immediately halt the move.

Leading the debate, Pwajok expressed concern that the planned massive borrowing was in spite of an intervention by Central Bank of Nigeria (CBN) in March 25, 2015, through the grant of a N213 billion bailout via the Nigerian Electricity Sector Intervention (NESI) facility.

He stated that, “In spite of that intervention, the shortfall, instead of being wiped out, has continued to escalate at the rate of about N15 billion per month (equivalent to N500 million daily), rising to a total-market shortfall of N400 billion as at December 31, 2015.

“A continuing incidence of market shortfall is a distinctive action for new investors to venture into the Nigerian electricity market. The implication being that the projected generating capacity expansion is an illustration since any increment in generating capacity would further escalate the market shortfall.”

Pwajok also noted that Distribution Companies (DISCOs) collected revenues but failed to remit them fully to other market participants adding that no measure was put in place by the Nigerian Electricity Regulatory Commission (NERC) to block such leakages nor penalties for defaulters.

He also lamented the recent increase in tariffs in spite of any noticeable improvement either in the area of generation, transmission or distribution.

Also speaking in favour of the motion, Hon. Chris Azubogu, said that in spite of constant bailout from the federal government, NERC was not doing much in power generation.

On their part, Hon. Johnson Agbonayinma, and Hon. Babajimi Johnson, noted that NERC had failed the Nigerian people, and urged that questions be asked as to how the bailout fund were utilised in the past.

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