Nigeria: Lawmakers stop N309b bond for electricity companies

*Nigeria's Senate chamber.

*Nigeria’s Senate chamber.

16 October 2016, Abuja — The Senate yesterday passed a resolution stopping the Federal Ministry of Power, Works and Housing from using the Nigeria Bulk Electricity Trading Company, NBET, to give electricity companies N309 billion bond.

The decision was a sequel to a motion sponsored by Senator Mustapha Bukar (APC, Katsina North).

Moving the motion, Bukar said the ministry was using NBET to raise a federal government-secured bond of N309 billion allegedly to cover the market shortfall made up of N187 billion accrued in 2015 and N122 billion projected Shortfall for 2016.

He said the market shortfall was defined as the invoice amount of electricity transmitted to the distribution companies in any given month less the amount remitted by the distribution companies to pay the market participants for electricity supplied.

“The negative consequences of the bond which would amount to not only spoon-feeding the operators in spite of their inefficiency but at great cost to Nigerians as the risk of default would cause the crystallisation of the Federal Government Sovereign Guarantee and lead to a national energy crisis in the future,” he said.

He said in spite of the lack of any noticeable improvement in the electricity sector whether, in the area of investment, generation, transmission or distribution, tariffs have been increased twice since 2013 without any improvement in the services.

“The new borrowing is being planned to be paid as a first charge on the market revenue stream ahead of CBN, whereas the first priority is to stop the bleeding in revenue and optimise efficiency by the operators,” he said.

In his remarks, the Deputy Senate President, Ike Ekweremadu, who presided over the plenary said the privatisation of the power sector has not yielded the desired results.

*Ismail Mudashir – Daily Trust

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