- CBN gave intervention funds of over N1.3 trillion to the power sector to prevent collapse due to liquidity, poor performance, and suppressed tariffs.
- In 2013, the Federal Government unbundled the PHCN and sold 18 utility firms to private investors, resulting in six GenCos and 11 DisCos.
The House of Representatives has resolved to investigate all the financial interventions, amounting to over N7 trillion, in the power sector. The investigation will cover the period since its privatisation to ascertain the judicious utilisation of the funds. The resolution came as Chairman of the Nigeria Governors Forum (NGF) and Governor of Kwara State, AbdulRahman AbdulRazaq, commended the signing of the Electricity Act 2023 into law.
The resolution of the House of Representatives was a sequel to the adoption of a motion moved at the plenary yesterday by Hon. Ademorin Kuye. Moving the motion, Kuye recalled that in 2013, the federal government unbundled the Power Holding Company of Nigeria (PHCN) and sold 18 utility firms to private investors. This resulted in six generation companies (GenCos) and 11 distribution companies (DisCos).
The rep member added that the privatisation of Nigeria’s power sector was necessary due to the failure of the defunct PHCN to attract investments. Still, the industry had not met Nigerians’ expectations. He stressed that the federal government had spent over N7 trillion on direct interventions in the power sector, despite privatising the industry, since November 2013. Kuye said these included the Presidential Power Initiative, a strategic approach to address Nigeria’s unreliable and inadequate electricity supply.
According to him, but for the interventions by the Central Bank of Nigeria (CBN) of over N1.3 trillion, the country’s power sector would have collapsed due to liquidity, poor performance, suppressed tariffs, lack of infrastructure at the transmission and distribution ends, and weak regulations and oversight. Kuye noted that since the privatisation, the power sector has received various financial interventions, including those from International donor agencies.
He said the World Bank had approved an International Development Association credit of $486 million. In addition, the African Development Bank (AfDB) provided a facility of $300 million to the TCN to upgrade transmission lines, among other intervention funding. The House mandated the Committee on Power to investigate all the financial interventions in the power sector since privatisation to determine the appropriate use of the funds and report back within six weeks for further legislative action.