The Minister of Power, Adebayo Adelabu on Friday told Nigerians that the current electricity tariffs will be reduced with time.
He said the tariffs may appear expensive for now but the rates will crash in the same manner the prices of telecoms and handsets fell when they first came to Nigeria.
He spoke while presenting his ministerial scorecard in Abuja.
Adelabu noted that the cost of generation, transmission, and distribution of electricity will reduce in the long run.
The minister said: “It might look expensive at the moment, but I am optimistic that these tariffs will go down. We know how much we were buying SIM cards when telecoms first came. We know how much we were buying the telephone sets but gradually as it scale off, generation, transmission, and distribution, these prices will also go down. So, it is a temporary hardship and it will lead to permanent gain.”
Adelabu said the electricity Distribution Companies are now responsive to their duties because the Nigerian Electricity Regulatory Commission (NERC) has improved its oversight over them.
He noted that the Nigerian Electricity Supply Industry (NESI) has made history by introducing a guaranteed service level for band A customers that get a minimum of 20 hours of supply per day.
He said the government has decided to test run a cost-reflective tariff and the liquidity conditions necessary for attracting investments with only 15% of its customers.
Adelabu said: “For the first time in Nigeria, we have what we call guaranteed service level. It might be for Band A today but no government has ever guaranteed 20 hours of supply, not to even 1% of consumers.
“But to 15% of consumers, we said, let us start from here and we have guaranteed service level for band A customers with the introduction of cost-reflective tariffs to that band, including liquidity conditions suitable for driving investment.”
He said the reforms in the NESI have attracted investments from the World Bank and the Nigerian Investment Sovereign Authority (NISA) in one year.
He attributed the progress in the industry to the Electricity Act 2023 and also recalled that prior to President Bola Ahmed Tinubu’s reforms implementation, the NESI was not attractive to any investor owing to the uninspiring tariff policy and huge debt overhang.
He said the banks had stopped lending funds to power sector investors.
Adelabu, however, said that presently, the launch of the Ministry’s Nigerian Power Investment Opportunities and Guidelines 2.0 has highlighted opportunities in the sector, it has fascinated $500million investment from the NSIA (Nigerian Sovereign Investment Authority and N750 million from the World Bank.
The Minister said the sector has started recording some progress in the last one year.
His words: “We have been able to attract investment into the sector because before now nobody was ready to touch this sector because the tariff policy was not inspiring, the debt overhang was too much.
“Nobody wants to bring capital even bankers don’t want to lend anybody money. But now that is a thing of the past. The Federal Ministry of Power has launched the Nigerian Power Investment Opportunities and Guidelines 2.0 which highlights some of the opportunities in the sector.
“We have also attracted $500million dollar initiative from NSIA (Nigerian Sovereign Investment Authority and the World Bank $750million.
“We are beginning to see some progress from the outcome of the reforms process and key achievements of the administration in the last one year.”
Adelabu insisted that the power sector has improved in the last one year, stressing the industry has gone beyond where it was.
The minister, who admitted the sector is yet to arrive at its destination, noted that since it is in the right direction, it will get to its desired destination.
He said: “The question is has power improved? Yes. It is no longer where we were in February and the journey of a thousand miles starts with a step in the right direction. We are facing the right direction.”
Adelabu said the Federal Government will in the next couple of months award the contract for the provision of 1.5 meters to Meter Asset Providers
He said the project which is funded by the World Bank is targeted at improving liquidity in the sector and also reducing estimated billing.
The minister said the government has targeted deployment of 10 million meters in the next five years with the provision of two million meters yearly.
He spoke at the presentation of his ministerial scorecard in Abuja.
“In the next five years, 10 million meters will be procured. And we have started started doing that.
“We just completed the bidding process for 1.5 million meters financed by the World Bank to improve sector liquidity and reduce estimated billing.
“Within the next couple of months, this contract will be awarded to the meter providers,” said the minister.
Adelabu said the Nigerian Electricity Supply Industry (NESI) has seven million metering gap.
On the metering gap, he said: “We have a Presidential Initiative scheduled to provide 2 million meters per annum for the next five years to bridge the metering gap that we have.
“We have about a 7 million meter gap in the industry. Out of over 10 million customers just a little over 5 million are metered.
“Everybody is complaining about estimated bills. Mr. President is determined to put an end to estimated billing so that nobody is cheating nobody.”
Adelabu said almost 50 meters have been procured now and deployed to all military formations nationwide to reduce Ministry Departments and Agencies’ (MDAs) debts and improve sector liquidity.
He, however, noted: “We will not relent until we have a resilient and efficient electricity sector that meets the needs of all Nigerians.”
The minister said the government has started settling the N47.19billion MDAs debts owed to the Electricity Distribution Companies (DisCos).
He said the ministry has decided to settle all the MDAs debts through one source – the Nigerian Electricity Liability Management Company (NELMCO).
Adelabu the government has adopted a centralized single point for the payment of the debt that will enter negotiation with the DisCos, which also has some liabilities to settle with the government.
He said: “They started paying. But we don’t want a situation whereby we are going to apply haphazard solutions for the settlement of MDA’s debts.
“It is going to be centralized now so that a singular point will be the point of payment of MDA’s debts.
“There won’t be another accumulation of MDAs debts again. We are assuring that. A lot of them are paying now. But we have what is called the legacy or historic debt of these MDAs.
“It is so much that they will not be able to pay them down at a go. We have an agency we call the Nigerian Electricity Liability Management Company.
“We are putting all these debts together and transferring them to NELMCO so that NELMCO will go into negotiation with all the DisCos and they will agree on modalities or a final settlement of these legacy debts because as the government is owing the DisCos, the DisCos to have liabilities to the government.
“So NELMCO is in a position to negotiate this and ensure we zeroed government debts to power distribution companies.”
Adelabu said the government has given the DisCos which are still under the management of the Assets Management Company of Nigeria (AMCON) and Banks a deadline to resell the firms to core technical operators.
He said the ministry has secured a World Bank project to procure the Supervisory Control and Data Acquisition (SCADA) in 24 months since 2023.
He gave the assurance that with SCADA in place, the National Control Center can monitor the entire national grid to ward- off its collapse.
Credit: thenationonlineng.net
