President Tinubu, on Monday, stated Nigeria’s power sector privatisation had failed to satisfy its goals.
Tinubu moted that the nationwide grid was serving solely about 15 per cent of the nation’s electrical energy demand regardless of being privatised 10 years in the past.
Tinubu spoke in the course of the Nigeria Electricity Supply Industry market members and stakeholders roundtable that targeted on privatisation, calling for the recapitalisation of power distribution firms.
Represented by the Special Adviser, Energy and Infrastructure, Office of the Vice President, Sodiq Wanka, the President stated, “10 years on, I believe it is fair to say that the objectives of sector privatisation have, by and large, not been met. Over 90 million Nigerians lack access to electricity.
“The national grid only serves about 15 per cent of the country’s demand. This has left households and factories relying on expensive self-generation, which supplies 40 per cent of the country’s demand.
“What is worse is that the total amount of electricity that can be wheeled through the national grid has remained relatively flat in the last 10 years. The grid capacity has increased from just over 3,000MW to roughly 4,000MW today. Versus a 40,000MW target by 2020 that the Federal Government had set pre-privatisation.”
The president said that the explanations for the sector’s underperformance within the final decade had been well-known, together with deep business, governance and operational points that had beleaguered the sector.
“As of Q2 2023, for every kWh (kilowatt-hour) of electricity sent to the grid, only 60 per cent is paid for. But as we know, even the tariff paid for that unit of electricity is far from being cost-reflective, especially in light of the recent devaluation of the naira.
“The sector has suffered chronic underinvestment, especially in transmission and distribution. Many of the successor utilities of the PHCN have failed to meet their performance improvement targets due to technical and financial capacity issues.
“We are in a vicious cycle of under-performance and under-investment, and everyone has a different view of which value chain player should be blamed for continued sector malaise.
“But we are where we are! And the real question we should ask ourselves in our engagements in the next three days is, how do we move forward from here?”.
He famous that within the quick time period, stakeholders within the sector should intensify efforts to handle business points and enhance the funding attractiveness of the sector.
He stated the sector ought to have a transparent plan to rebase tariffs to recognise the precise prices and loss ranges of the complete worth chain and permit for sufficient funding value restoration.
“We must be clear on shortfalls and how we will finance them. And there must be a clear path to extinguishing historic sector debts to various value chain stakeholders. A reconciliation exercise in this regard is already underway,” the president said.
