Nigeria’s Minister of Power, Mr Adebayo Adelabu has said the Federal Government would require 10 billion dollars investment yearly, for the next 10 years, to restore the power sector.
He said this at a one day investigative hearing on halting the electricity tariff increase by the Nigerian Electricity Regulatory Commission (NERC) organised by the Senate Committee on Power in Abuja, on Monday.
“For this sector to be revived, government need to spend nothing less than 10 billion dollars annually in the next 10 years.
” This is because of the Infrastructure requirement for the stability of the sector, but government can not afford that.
“And so we must make this sector attractive to investors and to lenders.
“So for us to attract investors,and investment, we must make the sector attractive, and the only way it can be made attractive is that there must be commercial pricing.
“If the value is still at N66 and government is not paying subsidy ,the investors will not come.
“But now that we have increased tariff for a Band, there are interest been shown by investors.” He said.
According to the minister, the major challenge in the power sector was the absence of liquidity, stressing that the sector had been operating on a subsidised tariff regime, given the absence of a cost reflective tariff.
Adelabu however noted that the subsidy had not be funded over the years as huge liabilities was being owed the Generating Companies ( GenCos) and the Gas Companies.
He added that government being unable to pay the outstanding N2.9 trillion subsidy was due to limited resources, pushing for the need to evolve measures to sustain the sector.
“The increase is based on supply, saying that any customer that do not received 20 hours power supply will not be made to pay the new tariff,” he said.
The minister further appealed to legislators to support the process of paying the debts.
He said the government was committed to ensuring sustainable reform in the sector, pointing out the investment in hydroelectric power, adding that the construction of 700 mega watt power in Zungeru had commenced, while Kashimbila Hydroelectric power plant of 40 mega watt was awaiting evacuation to improve generation.
In response, members of the committee condemned the experiences of Nigerians on electricity supply over the years.
The Vice Chairman of the committee, Sen. Lola Ashiru, there was a lot of inefficiency across the value chain of generation, transmission and distribution and yet Nigerians are paying for electricity.
Chairman of the Committee, Sen. Enyinnaya Abaribe, decried the present situation of power supply in the country, insisting that a solution must be reached.
Stakeholders at the event include; Nigerian Electricity Regulatory Commission (NERC), Manufacturers Association of Nigeria (MAN), Association of Power Generation (Gencos) and Electricity Distribution Companies (DisCos).