Nigeria: Senate Blames Govt for Insolvency of Power Sector

24 June 2020

Abuja — The Senate yesterday blamed the federal government for the current state of insolvency in the power sector, saying ministries, departments and agencies (MDAs) are owing Distribution Companies (Discos) over N98 billion for electricity consumed.

This is just as the Niger Delta Power Holding Company (NDPHC) claimed it was being owed N190 billion as at the end of May 2020 for power generated from its plant at the national grid.

Speaking at the end of a three-day investigative public hearing entitled "Power Sector Recovery Plan and the Impact of COVID-19 pandemic," the Chairman of the Senate committee on Power, Senator Gabriel Suswam, declared that the problem with the power sector was insolvency.

According to him, the Discos are being owed N98 billion by the MDAs "and unfortunately the Discos have not been able to collect the debts being owed them over time".

Suswan further said: "We are spending huge amount of money paying for debt that is already owed. We must begin to focus on how to address the issue of infrastructural deficits in the power sector. Let's spend money on metering. Let's at least meter about 80 per cent of those connections leading to the network and then be able to collect enough money to make the sector liquid. There are a lot of issues and those issues must be aligned. And that is what we are trying to do in this public."

Suswam also blamed the federal government as well as the stakeholders for the lack of sincerity of purpose in the power sector.

According to him, "the blame game among them has to stop. Once there is an alignment and proper coordination, that yes, if we generate 13,000 megawatts, and transmission is able to transmit at least 10,000 megawatts, and discos are able to absorb the 10,000, and there is proper tariff, it makes the sector solvent.

"Once there's money in the sector, the other potential investors will come in. The banks will be able to also put in more money, so that the sector will begin to run on its own. But where we are now, it will be unthinkable that government will stop providing the intervention. Once that stops, everything will collapse".

In his presentation at the public hearing, the Managing Director of the Niger Delta Power Holding Company of Nigeria (NDPHC), Mr Chiedu Ugbo, said over N190 billion was owed the company for electricity generated.

According to him, the present challenge for NDPHC is the low market remittance leading to huge indebtedness to NDPHC.

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