Nigeria still has an 8-million-meter gap which hampers liquidity. This is according to the country’s minister for Power, Bayo Adelabu.
He said this during a recent interview via Arise News while discussing the post-privatization of the power sector 10 years later.
According to him, the country’s metering gaps are making collection difficult, and this has given rise to liquidity issues.
He said, “Today we still have close to an 8-million-meter gap and if you do not meter, you cannot measure the utility supply. If you don’t measure you cannot bill, if you don’t bill, you cannot collect. So, collections have been very poor, and the name of this game is liquidity, if there is no liquidity in the system, almost all the sectoral stakeholders will suffer this.”
Going further he stated that the country has also not been able to close the metring gap for households, businesses and industries. He also highlighted the need to reduce the ATC&C losses incurred by distribution companies (DisCos).
According to him, A lot of private sector stakeholders have not kept to the terms and conditions of the privatisation, and there is also poor technical capacity of many of the operators in the industry and there have been poor investments in improving the infrastructure for the power sector.
He also highlighted the fact that it is not only the private sector that is to blame for where the power sector is now.
He said the government has also not lived up to expectations, in terms of effecting a cost-reflective tariff that will actually bring in liquidity to the power sector.
He also stated that it is the responsibility of the government to establish a functioning and effective power transmission system.
Presidential Power Initiative (PPI)
During the interview, the Minister explained that when the government initially conceived the PPI (Public Private Partnership Initiative), they set up a special purpose vehicle called FGN Power Limited, which was fully capitalized with counterpart equity funding.
However, the project, also known as the Siemens Deal, faced delays due to various reasons like the COVID-19 pandemic, political changes, and new regulations during President Buhari’s administration.
Adelabu said that currently, a comprehensive review is underway to adapt the plan to the present circumstances in the country. He also said that a part of the Siemens deal was for the company to bring in 10 mobile power substations and 10 power transformers into the country.
As of now, all 10 transformers have arrived in the country, and the 10 mobile power substations have also been delivered. The Minister indicated that soon, the installation of these substations and transformers will start, which will add 1300 megawatts (MW) to the country’s power transmission capacity.
Discussing the government’s efforts to prevent power grid failures, Adelabu mentioned that while the distribution and generation aspects of the power sector are now privately owned, the transmission segment remains under government control.
He highlighted a recent grid collapse after over 400 days without one, attributing it to a fire incident. The Minister emphasized that substations, power lines, and transformers across the country are in poor condition due to the fact that they are weak and dilapidated.
However, the government has been consistently investing in infrastructure development in recent years. Adelabu expressed confidence that the impacts of these investments will soon become visible to Nigerians.
