Lack of access to liquidity hampering power sector – NERC

*Electricity distribution sub station.

*Electricity distribution sub station.

14 October 2016, Lagos –  The Nigerian Electricity Regulatory Commission on Friday said the challenge bedevilling the nation’s power sector is lack of access to liquidity to promote investment in the sector.

The Acting Chairman of NERC, Dr Anthony Akah, said, “There is no doubt that every country has challenges and the power sector in Nigeria has its own challenges, and one of the challenges that we have is the issue of funding.”

He said that investment in the power sector requires huge amount of fund, noting that the non-availability of adequate fund constituted a hurdle to speedy development of the sector.

He said that in a bid to enforce standard in the industry, NERC was ensuring that all players stick to the specified rules and regulation governing the sector in Nigeria.

He said, “We need to make sure that we rightly price tariff and also make sure that there is market discipline, that the companies play according to the rules.

“We need to make sure that we increase monitoring mechanism to ensure that all the players adhere, or we have them sanctioned.”

He said that NERC was guiding against the abuse of market power by stakeholders in the value chain.

Akah said that the commission as the sector regulator was also ensuring that consumers get the right value for the tariff paid on electricity.

He said the commission was also developing the best regulatory framework to attract investors to the sector.

He said, “What we are doing is to make sure that we give the investors that are coming, a fair return on their investment.

“We want to make sure the tariff we guarantee is right, so that at the end of the value chain, the distribution companies would be able to remit the money.”

The NERC acting chairman also identified inefficiency in revenue collection by the distribution companies as a major challenge facing the sector.

He said, “The challenge of inefficiency in revenue collection is too high, the regulator has a lot of ample power to deal with this issues, but we are also facing a challenge.

“Right now some distribution companies have gone to court and got restraining order on NERC on enforcing the market rules.

“The market rules says that if you are not able to remit the money covering the power that was sent to you as a distribution company, your license will be withdrawn.”

Akah explained that full collection and remittance of the needed percentage of the fund by the distribution companies to other players in the electricity value chain would improve liquidity.

The acting chairman said NERC and the FG were making plans to pay up the debt owed distribution companies by MDAs, adding that the payment would also ensure liquidity to the sector.

He said the commission was developing a mechanism to smoothen electricity payment by consumers.

He said, “We are also to ensure that all the consumers pay for the electricity they consume.

“Some of the consumers had said they were not going to pay, saying that they were not getting the service for their payment, but now they are paying.”


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