The Nigerian Electricity Regulatory Commission (NERC) weekend said the challenge bedevilling the nation’s power sector is lack of access to liquidity to promote investment in the sector.
The Acting Chairman of NERC, Dr Anthony Akah, said, “There is no doubt that every country has challenges and the power sector in Nigeria has its own challenges, and one of the challenges that we have is the issue of funding.”
Akah noted that investment in the power sector requires huge amount of fund, noting that the non-availability of adequate fund constituted a hurdle to speedy development of the sector.
According to him, in a bid to enforce standard in the industry, NERC was ensuring that all players stick to the specified rules and regulation governing the sector in Nigeria.
“We need to make sure that we rightly price tariff and also make sure that there is market discipline, that the companies play according to the rules.
“We need to make sure that we increase monitoring mechanism to ensure that all the players adhere, or we have them sanctioned.”
Continuing, he noted that it was in order to guide against the abuse of market power by stakeholders in the value chain, stressing that the commission as the sector regulator was also ensuring that consumers get the right value for the tariff paid on electricity.
“What we are doing is to make sure that we give the investors that are coming, a fair return on their investment.
“We want to make sure the tariff we guarantee is right, so that at the end of the value chain, the distribution companies would be able to remit the money.”
He further identified inefficiency in revenue collection by the distribution companies as a major challenge facing the sector, saying “The challenge of inefficiency in revenue collection is too high, the regulator has a lot of ample power to deal with this issue, but we are also facing a challenge.
“Right now some distribution companies have gone to court and got restraining order on NERC on enforcing the market rules.
“The market rules say that if you are not able to remit the money covering the power that was sent to you as a distribution company, your license will be withdrawn.”
Akah explained that full collection and remittance of the needed percentage of the fund by the distribution companies to other players in the electricity value chain would improve liquidity.
