Nigeria’s power generation and distribution companies have warned of the possibility of a blackout all over the country, if the Federal Government fails to grant their N1.2tn request speedily.
The Senate had on Monday called for a declaration of state of emergency on the power sector after describing the 2013 power privatisation programme as a fraud.
Rahila Thomas, Country Representative of Energy Market and Rate Consultants disclosed at a round-table discussion organised by the Senate, in Abuja that the power sector needed N1.23tn urgently from government for survival alone.
She said the challenges confronting the sector were many and that the development had plunged investors into outrageous debts while creating loss of confidence in the entire value chain.
According to Mrs Thomas, “Issues bedevilling the power industry in Nigeria started with fatal flaws inherent in the 2013 privatisation anchored on wrong assumptions.
“This inhibited investors from taking care of their losses let alone delivering on the required electricity supply in the country.
“The fatal flaws or wrong assumptions upon which the privatisation was carried out in 2013 have to do with generation capacity government put at 6,500 megawatts.
“It later turned out to be 3,453MW. Assumptions in the loss for every Naira of kilowatts put at 21kobo but later turned out to be 52 kobo loss per every Naira of kilowatts with attendant unanticipated losses totalling far above a trillion Naira now.”
Thomas attributed the huge loss suffered in the sector by investors to the subsidies government promised on yearly basis on the 21 kobo loss per one Naira kilowatts. She stated that it later rose to 52 kobo loss per Naira kilowatts with government failing on its promise of subsidy payment.
She went further to say that “Even the N600bn reported to have been put on the table for the sector this year has not been accessed by investors 21 days to the end of the year.
“Another factor is that of Forex because exchange rate of a US dollar to Naira as of November 2013 when the sector was privatised was N157 but is now between N350 an N360.”
“Liquidity is the key problem in the sector due to unattractive investments in the industry.”
She declared that Nigeria had the capacity to increase power generation from the current 4,000 megawatts to the projected 7,000, 11,000 and 25,000 megawatts in years in the years ahead provided the current challenges are tackled adequately.
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