Power tariff shortfall down to $592m in 2021
Nigeria has recorded a historic cut down in power sector tariff shortfall from accumulation of N1.891 billion ($4.5 million) to N247 billion ($592.1m) in 2021.
The debts are equally projected to be eliminated by December 2022.
This is coming as the Nigerian Electricity Regulatory Commission (NERC) unveiled the Power Sector Recovery Programme website to enhance dialogue in the Nigerian power sector space.
The Power Sector Recovery Programme (PSRP) is a reform programme meant to improve power supply, restore financial viability and enhance accountability and transparency in the power sector.
At the programme launch, NERC Chairman Sanusi Garba recalled that the power sector reform initiated by the Nigerian federal government started as far back as 2005 with the creation of the EPSR Act which is the legal basis for the reform itself.
“In 2010, the government launched the roadmap to power sector reform. In 2013, there was a massive privatisation that took place.
“Associated with the privatisation itself, performance agreements were signed between the bureau of public enterprises and the core investors that took over the assets.
“Particularly for DisCos, it was a little bit more complex in the sense that they had what is called lost reduction trajectory over a period of 5 years,” said Garba.
He said looking at the condition of the state of the DisCos, the government came up with a policy document containing a number of actions, deliverables and funding in getting the sector to recover.
“Recovering the DisCos from the state where they are, requires so much to be done. Not only in terms of funding but also in terms of corporate governance and capacity building.
“The recovery programme is further complicated by the recent emerging challenges in the country. Quite a number of the distribution companies are largely affected by the security challenges in the country impacting their capacity either to deliver service or even to recover their revenue and so on.
“At the end of it all, I am happy to say that all the stakeholders involved in the power sector recovery programme are very much on track to doing what needs to be done both in terms of financial performance of the distribution companies, energy optics and so on,” he said.
Speaking on the new website, NERC Chairman said the website provides a channel of communication to the Nigerian people in order to enhance conversation and dialogue on what Nigeria is doing to get the power sector to work.
While presenting an overview and update of the PSRP Belije Madu of the PSRP secretariat said the issue of the power sector in Nigeria is centred around technical, financial and commercial components which all need to be synchronised.
Madu revealed that tariff shortfall payment has been cut-down from a historic accumulation of N1.891 billion ($4.5 million) to N247 billion ($592.1m) in 2021 and the debts are projected to be eliminated by December 2022.
“We are aiming to make sure that the tariff shortfalls go away by December.
“Regarding the 4,500MW, we have set both the financial and the commercial equivalent to ensure balance,” said Madu.
