10 October 2008
THE Nigerian Electricity Regulatory Commission (NERC) says timely release of the Electricity Subsidy Fund from the Multi-Year Tariff Order (MYTO) will be an incentive to investors.
Dr. Ransome Owan, Chairman, NERC speaking at an international conference and exhibition in Abuja christened "Powering Nigeria's Economic Growth," said the timely release of the fund would enable the commission to meet its agreement with investors in the sector.
"We were assured that the supplementary appropriation will take care of the fund. "I will be meeting with the minister to ensure that we do not jeopardise what we have started," he said.
The News Agency of Nigeria (NAN) recalls that the MYTO was approved in July by the Federal Government to address the issue of electricity pricing as an avenue to invite private investors' participation.
Government also approved the sum of N178 billion as subsidies for electricity consumers with a moratorium of three years when power generation was expected to improve.
The release of the fund was however, projected to reflect in the appropriation budget for this year to enable NERC make the necessary payments due to the private investors.
Owan said that MYTO gave the regulated entities the incentives to do better than the projected performance levels built into the tariff. "Each company's incentive is based on its cost and productivity considerations.
"MYTO provides a 15 years tariff path for the electricity industry, with limited minor reviews each year in the light of changes in parameters like inflation, exchange rates and gas prices; and a major review every five years," he said.
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