03 March 2017, Sweetcrude, Abuja – Since investment in the Nigerian Electricity Supply Industry (NESI) cannot be guaranteed unless low liquidity challenges in the value chain are tackled, the federal government has been asked to ensure that all funds collected by the Distribution Companies (Discos) are remitted appropriately.
A civil society organisation, Centre for Social Justice (CSJ), has recommended that the Nigeria Electricity Regulatory Commission (NERC) collaborates with the Central Bank of Nigeria (CBN) in carrying out a forensic audit of all the accounts of the Discos with the commercial banks throughout the country so as to confirm their exact revenue profiles.
The CBN was also asked to create a single digit interest special renewable energy fund to be dedicated to the expansion of renewable energy solutions in the country.
Such a fund should be configured to support skills acquisition, capacity building and local production of renewable energy components. These were part of the recommendations in a 21-page report on ‘Implementing the Nigerian Electricity Market Stabilisation Facility: A Review’ which was released in Abuja yesterday by CSJ in collaboration with Henrich Boll Stiftung.
Unveiling the report at a media briefing, the CSJ Lead Director, Mr. Eze Onyekpere, listed other recommendations to include Nigeria taking steps to build capacity with a view to earning hydro-carbon credits under various climate change and environmental agreements.
The group also recommended that the federal government should use favourable policies to attract investment, noting that one way of improving power generation capacity was by ensuring that favourable policy environment is in place, as this will attract more investors in the country’s power sector.
It added that employing efficient power generation technologies, swifter execution of power projects with maintenance and replacement of failing infrastructure were other recommendations that could help to achieve effective growth of the sector.
It further recommended for appropriate sanctions to be meted out to any distributor found to be collecting enough revenue that will enable it to pay for the market operators and Nigerian Bulk Electricity Trading Plc (NBET) invoices but has not done so.
The CSO urged the National Council Of Power (NACOP) to address low liquidity level in the power sector value chain by meeting with the Discos and NERC to examine the reasons for the poor level of revenue collection and work towards solutions that will be implemented immediately for growth and sustainability of the industry.
These recommendations, CSJ believes can be done to guarantee private investment in NESI to ensure improved power supply
In another report titled: ‘Solar Energy and, the Federal Budget: 2012-2016′, CSJ stated that the full observance of the Public Procurement Act 2007 had become imperative thereby urging the federal government to start with procurement planning.
It stated that contract bidding processes bring about competition, prevent bid rigging and ensure value for money. CSJ also recommended that provisions should be made for maintenance of the solar energy items by the contractor for a guaranteed length of time and not just based on “install-and-abandon” basis.