Kunle Kalejaye 22 February 2017, Sweetcrude, Lagos – The Nigerian Electricity Regulatory Commission, NERC, has advised the Senate Committee on Privatisation against the reversal of the Federal Government’s sale of the power industry utilities to private sector players.
NERC acting chairman, Dr. Anthony Akah, told members of the committee who were on oversight visit to the commission, said the Federal Government may not have money to buy back the utilities and may be acting in contravention of the agreement entered into with the new owners of the utilities.
Any attempt to reverse the sale of the utilities, he argued, “will send a wrong signal to potential investors.”
Rather, Dr. Akah said that the Senate should consider lifting the ban it placed on the bond being proposed for the industry to make cheap funds available for investors and that the Federal Government should consider subsidy option for power sector, considering that some other sectors of the economy were still being subsidised.
He assured that the commission will develop a robust framework for the utilisation of the Power Sector Bond if approved to ensure prudent and optimal utilisation of the Bond by licensees in the electricity value chain.
The acting chairman, in response to the questions asked by members of Senate Committee led by Senator Ben Murray-Bruce, said that experience from other countries where privatisation was done has shown that three years may not be enough to clear challenges that were created over thirty years in the power sector.
Admitting however that the operators in the sector have not met the signed level of performance agreement reached between them and the Federal Government represented by the Bureau of Public Enterprise, BPE, he said: “We appreciate your concern. We share your fear. The first three years is always very challenging in most countries where privatisation of the power sector was done.
“The regulator is very much conversant with the challenges of privatisation in the Nigerian power sector working with other stakeholders to resolve these teething problems.”
“The Commission has identified that the remittance by the electricity distribution companies’ level is too low and it is totally unacceptable to us. The Commission would soon introduce regulatory mechanism to redress this remittance abnormality.”