24 January 2017, Abuja – The Minister of Power, Works and Housing, Mr. Babatunde Fashola has said that ongoing discussions with the Ministry of Finance and the World Bank on the teething challenges of Nigeria’s privatised electricity market would focus on improving the market’s governance practices, deployment of meters to consumers, and reduction of operational losses.
THISDAY in December 2016 exclusively reported the federal government’s meeting with the World Bank in which both parties initiated measures to restructure and reposition the power sector from its current operational challenges.
According to operators in the country’s electricity market, the sector is currently going through a tough time with chronic financial illiquidity, and other operational challenges threatening to overwhelm it.
Fashola said at a recent power dialogue organised by Nextier Advisory in Abuja that a policy framework that would help establish a stronger and better institutional framework needed to tackle the challenges of the sector was being discussed with the World Bank and ministry of finance.
He however refused to disclose the entire content of the policy because according to him discussions were still underway, but noted that the policy would target improvements in metering of consumers by the electricity distribution companies (Discos), sanctions for energy theft, and adherence to contractual obligations by operators in the sector.
The minister explained that this would also help the sector overcome its current financial challenges and strengthen the financial base of the Nigerian Bulk Electricity Trading Plc (NBET).
Fashola stated that the plan has equally been presented for consideration and approval by the Federal Executive Council (FEC) and that when implemented, market issues such as payments for services such as gas supplies would be addressed to the operations of electricity generation companies (Gencos).
“Clearly, these policies constitute the way forward and ensure that everybody in the system gets paid. If we have that, at least, we can be sure that those who are supplying gas will not be shutting down because their creditors are pulling them. Then we go to the other side that are angry to see what we can do because gas problem is exacerbated on both sides,” he stated.
He added: “So, governance issues, we are addressing them because it is part of our discussion with the World Bank, and we can get this done, we can fix this sector. These are problems that can be solved because they are human issues and man-made mistakes.”
Speaking on repeated calls from different sections for him to approve and declare the ‘eligible customer’ clause in the market rule, the minister said there was nothing holding him back from doing that but that the current market conditions were not suitable for such declaration, hence his choice to apply caution in the process.
He said: “There is nothing stopping me from declaring that. My team and I have being discussing this and as easy it sounds to do, there are existing contracts in the system that we have to consider. These are policy debates we are holding and we believe we will get there gradually but first we have to consider the pros and cons.”