Vice President, Professor Yemi Osinbajo, has declared that the federal government has spent N1.5 trillion as intervention fund in the power sector.
Osinbajo said this on Tuesday, during a power sector event at Kainji Hydro Power Plant in Niger State.
The vice president, who was represented by the Minister of Power, Sale Mamman, also noted that no power distribution company in the country has paid tax to the government since the sector was privatised six years ago.
“The Federal Executive Council recently approved the third round of intervention funding for the (power) sector, with a total of about N1.5tn in the last two years.
“However, if the country is to achieve its aim of channelling funding to other critical sectors of the economy, it is pertinent that structural reforms be put in place to enable the power sector to fund itself sustainably,” he stated.
Osinbajo said the federal government has continued to support the sector through interventions and appropriate policies; saying no venture owned by government would thrive without the private sector playing a major role.
He promised that government would do its best to address problems facing the sector.
He added, “These policy reforms must however take into consideration the need for under-privileged Nigerians to gain access to affordable electricity to power their homes and small businesses, as the government seeks to move Nigeria further up the World Bank’s doing business rankings.”
But power generation companies have threatened that they could shut down operations, due to the reduction in the monthly payments of their invoices from about 80 per cent to 15 per cent.
Speaking at the event’s round-table conference that focused on unlocking real liquidity in the industry, Sani Bello, Chairman, Mainstream Energy Solutions Limited (MESL); concessionaire to Kainji and Jebba hydro power plants, said Gencos cannot survive on the 15 per cent invoice payments they are currently receiving.
He said, “I hope the minister will do whatever he can in his capacity to see that our payments are improved. In the last months, between May and June, we only received 15 per cent of our invoices as power generation companies. I do not think we can continue to survive with 15 per cent payments.”
Andrew Nevin, the Chief Economist, PwC Nigeria, in his presentation, also noted that findings by the firm has shown that no power distribution company paid tax to the federal government since the sector was privatised.
“No Disco has paid any income tax to the Federal Government since they were privatised,” Nevin established.
Andrew advised that to increase the revenue of Discos and address lack of liquidity in the sector, “the power distributors should be allowed to sell about 50 per cent of their energy to industrial users at an increased tariff of N80 per kilowatt-hour.”