By Adewale Sanyaolu
Stakeholders in the nation’s power sector have urged strict monitoring of the Central Bank of Nigeria (CBN) N120 billion intervention fund for the 11 Electricity Distribution Companies (Discos) to avoid diversion.
Recall that the Special Adviser to the President on Infrastructure, Ahmad Zakari, had last week said N120 billion capital expenditure (CAPEX) fund is being provided by the Central Bank for DisCos to improve infrastructure for the tariff classes similar to the ongoing metering programme.
PwC’s Associate Director, Energy, Utilities and Resources, Habeeb Jaiyeola, advised the government to clearly outline and monitor the intervention to ensure it achieved projected objectives.
He said the National Mass Metering Programme may need to be checked against some of its set objectives in terms of coverage, availability and completion time.
“This is an important process for any past and future intervention programme in ensuring set objectives are achieved.
An assessment of the impact of intervention funding in the power sector also needs to be looked into. While government intervention continues to be an important sector catalyst, monitoring impact will ensure government scarce resources are appropriately channeled for the benefit of Nigerians,” the expert said.
Former Chairman of Nigerian Electricity Regulatory Commission (NERC), Sam Amadi, said the intervention by the CBN to meter consumer should be supported.
“I support the funding for meters but I doubt if it will solve the problem because the DisCos will use the fund to largely replace bad meters and control revenue loss. But the rebate of unmetered customers will remain high and undermine any movement to cost reflective tariff.
He however stressed that there was need for NERC to speak more on funding for the sector and also ensure that its capacity to regulate expenditure and ensure it goes to what is relevant and prudent should be a critical factor in funding support for the sector.
“Government should directly mandate full metering in a large scale and allow discos charge whatever tariff that is necessary and no longer fund DisCos. Meter Nigerians and let them pay the right tariff and let discos live or die by their own efficiencies. If they fail the efficiency test you unbundle them,” Amadi said.
Energy expert, Michael Faniran noted that metering remained critical for the power sector as it would enable the sector to generate enough revenue to address the liquidity gap in the sector.
According to him, without government intervention in bridging the metering gap, DisCos may not show willingness to end arbitrary billing of consumers.
Faniran noted that there the critical need for government to support infrastructure development in the sector being also an investor in the distribution link, adding that without infrastructure that would reduce collection challenges the sector would not be able to fund gas and other links in the sector.