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Senate to review 2013 power privatisation, questions FG’s funding

Government should not be given free money. N1.8 trillion has been given to DISCOs maybe in their books.

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The Senate has asked its Committee on Power to review the agreement signed in 2013 on the privatisation of the power sector.

This was disclosed by the Senate President, Ahmad Lawan, on Monday, while declaring open an Investigative public hearing by the Senate Committee on Power.

Lawan explained, via his Twitter handle, that the public hearing was on Power Sector Recovery Plan and the impact of COVID-19 pandemic. He further explained that the overall expectation of the Nigerian government and the citizens was that the power sector, after privatisation, would be far better, but it is disappointing that the expectation was yet far from being fulfilled.

He said: “When you have privatization, you have Share Purchase Agreement. This investigation should look at what has happened.

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“What are the responsibilities and the obligations of the Federal government in the Share Purchase Agreement. What is BPE(Bureau of Public Enterprises) supposed to do. And equally and very important, what are the successful investors who are given 11 DISCOs and Six GENCOs supposed to do and within which time framework.”

According to him, Government should not be given free money. N1.8 trillion has been given to DISCOs maybe in their books. The actual money might have been given to the GENCOs.

“N1.8 trillion is a huge amount of money. Is it part of the Share Purchase Agreement that we should be given this kind of money or what are we supposed to do as a government. What is our obligation?

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“Government cannot afford to just spend money that you hardly understand why it is given and I will advise the Executive here, next time, if there will be any next time, to give such money, bring it to the National Assembly for approval.

“We want to be very critical on how funds are given to privatized enterprises. We expect that by now, our level of generation, transmission and distribution would have been far better,” he said.

Lawan, however, said he would rather call for a review of the privatisation deal and not for an outright cancellation of the deal.

He added, “Why I will not call for an outright reversal of the privatization that was done in 2013, I believe the time has come for us to review it.

“If those who are in charge now don’t have the financial muzzle, please let’s admit that we should look for partners who will come in with more funds.

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“If government cannot fulfill its obligations because it holds 40 percent, let it divest so that we don’t hold this sector unnecessarily stagnant.”

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The Senate President said Nigeria could not have made any serious, meaningful and sustainable progress without power.

Background: The Power holding Company of Nigeria was in 2013 unbundled to pave way for the emergence of six Generating Companies(GENCOs), 11 Distribution Companies(DISCOs) and one Transmission Companies of Nigeria. Both the GENCOS and DISCOs are fully privatised outfits.

Abiola has spent about 14 years in journalism. His career has covered some top local print media like TELL Magazine, Broad Street Journal, The Point Newspaper. The Bloomberg MEI alumni has interviewed some of the most influential figures of the IMF, G-20 Summit, Pre-G20 Central Bank Governors and Finance Ministers, Critical Communication World Conference. The multiple award winner is variously trained in business and markets journalism at Lagos Business School, and Pan-Atlantic University. You may contact him via email - [email protected]

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Energy

Nigeria to fix irregular power supply in 40 years- Senate

40 years is needed due to underfunding and the FG’s failure to fix the challenges of electricity generation.

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Nigeria to fix irregular power supply in 40 years- Senate, Customers to pay for metering through cost of tariff- NERC

The Nigerian Senate has said that it will take Nigeria 40 years to fix irregular power supply.

This was disclosed by the Senate Committee on Power on Tuesday after the Minister of Power and his team made a presentation to the Committee, according to Guardian.

READ: N2trillion Mambila project: FG starts disbursement of compensation funds

The four decades wait, according to the lawmakers, is due to underfunding and the Federal Government’s failure to fix the challenges of electricity generation.

The committee was astonished by the submission of the Minister of Power, Mamman Saleh, that of the N165billion required for capital projects in 2020, N4billion was given as bribe of which only N3billion was cash-backed.

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READ: FG guarantees mortgage loan to low income buyers at low interest rate

In lieu of this, the Committee dismissed claims made by the minister over raising hope on early provision of constant power supply, while Managing Director of the Transmission Company of Nigeria (TCN), Sule Ahmed Abdulaziz, painted a gloomy picture during the ministry’s budget defense.

A member of the Committee, Danjuma Goje, expressed concern that based on Abdulaziz’s presentation, N165billion was proposed, but the ministry gave N4billion in envelope, insisting that it would take 41 years to deliver constant electricity when N165billion is divided by N4billion.

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Backstory

Recall that Nairametrics had earlier reported that it will take nothing less than $100 billion to enable stable power supply in Nigeria.

READ: Bitcoin Whale transfers $1.1 billion worth of crypto for $3.58

What they are saying

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Mr. Danjuma expressed pessimism over hopes of stable power supply in the country. He went as far as stressing that even if ongoing projects are being completed there is still no hope for stable transmission of power in the country.

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Mr. Danjuma was quoted as saying: “Going by the minister’s presentation that transmission gas increased from 5000 to 8000 megawatts, it is not enough. When dishing out figures, we should bear in mind that capacity, transmission, and distribution have increased and that Nigerians, manufacturers, and industrialists want to see stable electricity.

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Energy

FG set to create at least 5 million jobs for youths in the power sector – Minister of Power 

FG is set to create at least 5 million jobs for the youths, through its 5 million solar power initiative and other projects.  

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FG set to create at least 5 million jobs for youths in the power sector – Minister of Power , Consortium of Western investors to inject upwards of $5 billion in Nigeria's renewable energy sector, Power: Nigeria's deal with Siemens - the birth of a new era?

The Minister of Power has disclosed that the Federal Government of Nigeria is set to create at least 5 million jobs for the youths, through its 5 million solar power initiative and other projects.  

This was disclosed by Engr. Sale Mamman, The Minister of Power, during a stakeholder meeting in Jalingo, the Taraba state capital, where he addressed youths on the need to foster peace and harmony. 

READ: FG discloses how the problem of the power sector was created

READ: #EndSARS: FG creates new N25 billion Youth Fund, to increase to N75 billion in 3 years

Mamman, stated that in line with the demands of the youths, the Federal Government is set to create massive job opportunities for Nigerian youths in the power sector through its 5 million solar power initiative. 

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This initiative includes the five million Solar Home System (SHS) project, the Mass Metering Scheme, among others. 

The minister lauded the youths for making their voices heard on developmental issues, He urged the youths to shun violent protest while giving the President a chance to implement their demands and other ongoing robust projects on youth empowerment. 

READ: How Geregu Power became one of the best performing power plants in Nigeria – Akin Akinfemiwa

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What they are saying 

Speaking on the initiative to immerse 5 million Nigerian youths into the power sector, the minister said: 

“Plans are ongoing to kick start this and it is being designed to ensure that majority of the firms and the installers are Nigerian youths. This is also part of the commitment of President Muhammadu Buhari’s focus on lifting 100 million people out of poverty within 10 years. 

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“From the briefings I have received so far, the youths are taking up opportunities in this aspect as well as in renewable energy. This is another way the government will be empowering young Nigerians as the local assembly; installation and the maintenance of these meters are largely handled by our industrious youths.” 

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“The minister urged the youths to vigilant and resist and attempt by some people to use them to incite violence for their sinister motive, noting that the Federal Government was tailoring more programmes for the youths through the Siemens Presidential Power Initiative and in building capacity on renewable energy.” 

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READ: Buhari to commission Lagos-Ibadan railway January 2021, starts operation November 2020

“There is the assurance of Mr. President that Nigerians will be beneficiaries of the Siemens project which will turn around the power supply situation of Nigeria. When this happens, industries will be revived and SMEs driven by youths will thrive more. 

READ: Senate summons Fashola, Ahmed over contract sum variation for Second Niger Bridge, others

What you should know 

  • The initiative is expected to commence with a target for one-million-meter installation at least by December.  
  • The implementing agencies of the initiative are the Rural Electrification Agency and the Niger Delta Power Holding Company. 
  • However, the Central Bank of Nigeria is supporting local firms and Meter Asset Providers on financing the initiative. 
  • The National Power Training Institute of Nigeria (NAPTIN) is expected to play an active role in order to ensure that more youths become solar power installers and dealers to create a whole new trend of skills for self-empowerment. 

READ: N75 billion Nigerian Youth Investment Fund to be rolled out before end of October – Minister

Why this matters 

The 5 million Solar project initiative will be implemented through the Economic Sustainability Plan steered by Vice President Yemi Osinbajo, and it is expected to create opportunities for manufacturers of solar panels, installers, revenue collection agents and technicians. 

This initiative is expected to reduce the level of unemployment in Nigeria, and cater to demands for better opportunities by the youths, through self-employment. 

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Energy

Petrol price to increase further, FG to add strategic reserves’ management cost

The pump price of petrol may be witnessing an increase as FG is set to add to it, strategic reserves’ financing cost.

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IPMAN, PPPRA, NNPC, Reduce funding oil subsidy - IMF to Nigeria , Oil marketers, PENGASSAN call for subsidy removal 

There could be a further increase in the retail pump price of petroleum products like petrol, kerosene and diesel.

This is due to the Federal Government’s proposal of the addition of the cost of managing the national strategic stocks of petroleum products to the retail price of the commodities.

READ: Petrol supply drops by over 23% due to decline in consumption

According to a report from Vanguard, this proposal is contained in the 2020 Petroleum Industry Bill (PIB) which is currently before the National Assembly for passage.

This means that the passage and subsequent signing into law of the PIB, will lead to further increase in the pump price of petrol. Other things being equal, as the cost of managing the national strategic fuel stocks would, from then, form an integral component of the pricing template of petroleum products and would determine the pump price of the commodities.

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READ: Local refining; A panacea for Nigeria’s reliance on imported refined products

Other current components of the pricing template, apart from the landing cost include the National Transportation Average (NTA), the Nigeria Ports Authority (NPA) charges, marketers margin and transportation costs.

In the new PIB that is before the National Assembly, the new Nigerian Midstream and Downstream Petroleum Regulatory Authority that would emerge from the scrapping of the Petroleum Products Pricing Regulatory Agency (PPPRA) and the Petroleum Equalization Fund (PEF), is to be saddled with the responsibility of setting up and managing the national strategic stocks of petroleum products.

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READ: #EndSARS: IPMAN warns of looming fuel scarcity across the country

The new agency would determine the amount to be charged as a levy for financing the strategic petroleum products’ reserves. Which would form part of the retail price of each of the petroleum products, and also mandate to work with security agencies in deciding areas of the country where the national strategic stocks would be maintained and distributed. The 2020 PIB partly reads;

  • The Authority shall: establish, administer and ensure the storage and distribution of the national strategic stocks of petroleum products in accordance with regulations issued by the Authority.
  • Determine and publish the amount to be charged as a levy for the financing of the national strategic stock, which shall form part of the retail price of each petroleum product, such levy to be determined as a percentage of the retail price and be deducted on a wholesale basis.
  • And designate, in consultation with the appropriate authorities and national security agencies, the strategic locations across the country where the national strategic stocks shall be distributed and maintained.”

READ: FG clamps down on filling stations, others for faulty measuring and weighing equipment

The PIB is also proposing that facilities and infrastructure which are to be specifically defined by the soon-to-be-established Nigerian Midstream and Downstream Petroleum Regulatory Authority for the storage of national strategic stocks would be exempted from the provisions of the law relating to open access.

The other functions of the Nigerian Midstream and Downstream Petroleum Regulatory Authority in the new PIB include; regulating and monitoring technical and commercial midstream and downstream petroleum operations in Nigeria, and determining appropriate tariff methodology for processing of natural gas, transportation and transmission of natural gas, transportation of crude oil, and bulk storage of crude oil and natural gas.

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What this means:

This is going to add more financial burden to Nigerians who are already complaining of the high cost of petroleum products, which has negatively impacted on the price of goods and services.

It can be recalled that the Federal Government had some time ago proposed a new charge on petroleum products for road maintenance across the country. This was roundly condemned by Nigerians and some stakeholders before the idea was later suspended.

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