02 November 2016, Sweetcrude, Lagos — The Nigerian electricity market revenue shortfall has been projected to hit N809 billion by December 2016.
This was revealed by the Association of Nigerian Electricity Distributors, ANED to news reporters in Lagos.
ANED Executive Director for Research and Advocacy, Mr. Sunday Oduntan said the currently challenges bedeviling Nigerians Electricity Supply Industry, NESI three year after it was privatised led to the shortfall stating that none-cost recovery nature of the tariff had a direct impact.
“The current electricity market revenue shortfall is projected at N809 billion by December 2016 caused by a direct impact of the non-cost recovery nature of the tariff,” Oduntan said.
He explained that under the Performance Agreement for the sector, the Federal Government stated that there would be cost reflective tariffs from the beginning which never happened as Residence Tow, R2 customer class were politically frozen in 2015 resulting in a loss of over N300 billion in December same period.
Oduntan added that the delay in reflecting costs in the power sector means a growing increase in deficits for investors stressing that the sector is no longer bankable as banks are unwilling to lend Distribution and Generation companies to inject critical capital investment. “Banking sector is exposed to oil, gas and the power sector to the tune of over three trillion Naira,” he said.
Other challenges bedeviling the sector according to Oduntan, includes regulatory uncertainty, gas supply, vandalism of gas pipeline, neglect of aging turbines, limited transmission capacity, none payment of electricity bills by customers and government agencies, energy theft, and limited access to finance.
He urged the Federal Government to implement total cost recovery, improve transmission capacity, increase funding in the sector, assist in curbing energy theft, access to forex and uninterrupted gas supply as requisite to improve the current state of the power sector.