FG weighing withholding N100bn power support fund till after 2019 BPE review
Strong indications emerged Wednesday that the federal government may be considering holding back the planned release of N100bn power sector support fund pending when it has completed a major review and assessment of the activities of players by next year.
A top official of the Ministry, who spoke to the Business Hilights Abuja Bureau Chief on Wednesday, revealed that “By provisions of the White Paper that powered the unbundling of former Power Holding Company of Nigeria (PHCN) five years ago, government through the Bureau of Public Enterprises (BPE) is supposed to take another look on the performances of the concessionaires”.
The official who pleaded anonymity also queried why some Discos are so serious in grabbing the money when they have agreed on their own according to their documents during the bidding process that they have all it takes to fix the sub-sector. He said because of the way and manner power companies are trailing the money before the planned review, government may be forced to hold on pending after the review so as to find out those that really did the needful on their own during the first five years.
He regretted that “The primary target of the government in unbundling power sector is to bring in deep pocket investors who have the credit worthiness and technical competence to attract both experts and cheap foreign funds to revamp the system and not to be looking onto government for ‘handouts’ in the colouration of grants or so”.
Business Hilights recalls that during a recent Oversight Function visit to the headquarters of Discos in Lagos, the Chief Executive Officer of Eko Electricity Distribution Company Plc, Mr Adeoye Fadeyibi said the planned N100bn government support for the power sector will go a long way in bettering the fortunes of DisCos, if released.
While identifying illiquidity as a major challenge facing operators, he maintained that there is the need the support funding as banks have refused to lend to the sector due to its high debt profile.
According to him, though the liquidity challenge was grave, the DisCo would continue to work towards delivering on its mandate, as discontinuing business was not an option.
Earlier in his response, the Chairman of the Senate Committee on Power, Steel Development and Metallurgy, Mr. Enyinnaya Abaribe, while admitting that the country’s power sector was in a critical state, and needed serious intervention, he explained that the objectives of the visit was to seek clarification on the issues bedeviling the nation’s power sector after the handover of the successor companies since November 2013.
He said “It is also going to help us in policy formulation because we are also going to interact with the Ministry of Power, Works and Housing; the Nigerian Electricity Regulatory Commission (NERC) and with other relevant agencies. Clarification of issues is very necessary for us to understand exactly what is going on.
“Now, why we are here is to be sure; if the privatisation is not working, why is it not working, who is at fault, what are the things that are supposed to be done, and those are the answers that we have come to seek, and, of course, Nigerians will get everything that will help them in making a good decision about whether it was a very good decision or not.”
It is expected that the Committee will submit a comprehensive report that may either quicken the planned review of the performances of the companies earlier than expected or advise for release of the power sector support grant of N100bn.
