Businesses lose N96.4 trillion as power failure worsens

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According to the projection of the World Bank, Nigerian businesses may have lost nothing less than $232 billion (N96.4 trillion) in the last eight years that the Federal Government and operators in the sector dilly-dally on making it perform.

While government ministers in charge of power, the Transmission Company of Nigeria (TCN) and Nigerian Bulk Electricity Trading Company (NBET) trade fresh blame with the Distribution Companies (DisCos) and the Generation Companies (GenCos), industries and homes across the country are hit by total darkness.

Meanwhile, there is plan to increase the tariff which was designed under the Service Based Tariff (SBT).

The GenCos, at a media briefing yesterday, insisted that illiquidity caused by the huge sums owed GenCos by NBET “more than ever before continued to frustrate the GenCos and keep them incapable of meeting their obligations which are extremely necessary to keep their power plants running and make capacities available.”

World Bank’s Practice Manager, West and Central Africa Energy, Ashish Khanna, had said the country’s power sector has not kept up with demand or provides reliable supply to existing customers.

Khanna went further to disclose that businesses in Nigeria lose about $29bn yearly because of unreliable electricity. That figure, in the last eight years that the sector was privatised, stands at about $232 billion. Converted to naira based on the country’s current exchange, that amounted to N96.4 trillion. The losses near double the N76 trillion cumulative national budget under Buhari’s government from 2015 to 2022.

Zainab told International Monetary Fund in a virtual meeting over the weekend that the era of subsidy for power consumers has now ended, meaning that consumers would witness progressive increase in tariff through 2025 going by the design of the SBT.

Spokesperson for TCN Ndidi Mba had said: “A summary of the power generating profiles in the last two months, for instance, clearly shows that 14 gas-powered stations were either not generating at all or had limited generation at various times within the period, further depleting the quantum of power generation available for transmission into the grid on a daily basis.

“Power generating stations in this category include: Omotosho units five and six; Olorunsogo units three, four and six; Omoku units three and six; Omotosho NIPP units three and four; Delta units 15, 17, and 18; Afam VI units 11 and 12; Olorunsogo NIPP unit three; Ihovbor NIPP unit two; Sapele Steam unit three; Sapele NIPP unit three; Odukpani NIPP units one and three, and Okpai units 11, 12 and 18.”

According to him, the end users have been subsidising electricity market by paying for products that are not delivered or pay for the same amount for electricity even when they don’t get supply in months.

Olubiyo said, there have been 500 per cent increase in billing from October 2020, which end users did not enjoy in the real sense, especially the commensurate number of hours of power supply that they are supposed to get based on the contract of Service Reflective Tariff.

Pointing out some tariff faults, Olubiyo said the foreign exchange and gas component of the tariff would continue to impact negatively on prices of electricity unless there are deliberate efforts to clean up the sector wide inefficiencies.

“Moving forward, Nigerian has the option of cleaning up several production cost and tariff inefficiencies. The easiest way to achieve this is by allowing gas to power generation companies, markets players, market participants and all those involved in the day to day business of production of gas, key players in electricity market value chain to have unfettered access to official exchange rate window, which will go a long way in reducing market shortfalls and Induced tariff shortfalls,” he said.