Gencos: FG, W’Bank Not Meeting Targets in Program to Salvage Power Sector

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Stories By Chineme Okafor in Abuja
Power generation companies (Gencos) in Nigeria’s electricity market have said that the sector has not recorded any remarkable improvement two years after the federal government and World Bank commenced the implementation of the Power Sector Recovery Programme (PSRP) – a joint plan to resuscitate the dwindling fortunes of Nigeria’s privatised power market.

The Gencos in a note from their umbrella trade association – the Association of Power Generation Companies (APGC), obtained by THISDAY, explained that while the PSRP was a five-year programme to comprehensively revive the sector, most of its planned interventions have not been implemented.

The APGC through its Executive Secretary, Dr. Joy Ogaji, stated that power supply in Nigeria has not improved even in urban parts of the country, and that the national grid still witnesses system collapses which had occurred thrice so far in 2019.

“In March 2017, the PSRP was launched by the federal ministry of power after engaging with players in the Nigerian power sector.
“PSRP is a series of policy actions, operational, governance and financial interventions to be implemented by federal government of Nigeria over the next five years to restore the financial viability of Nigeria’s power sector, improve transparency and service delivery, resolve consumer complaints, reduce losses and energy theft and RESET the Nigerian.

“The objectives of the PSRP are to: restore the sector’s financial viability; improve power supply reliability to meet growing demand; strengthen the sector’s institutional framework and increase transparency; implement clear policies that promote and encourage investor confidence in the sector; and establish a contract-based electricity market,” said Ogaji.
Continuing, she said the PSRP comprised of components and reform actions in four groups of financial; operational or technical; governance; and policy interventions, adding however: “It is one thing to plan a project, implementing it to the latter is another.”

According to her, the PSRP was designed to be implemented by dimensioning and committing to fund implied future sector deficits from 2017 to 2021; eliminating historical sector revenue deficits; eliminating historical government Ministries Department and Agency (MDA) debts and automate future payments; as well as restoring appropriate tariffs over the next five years and review of the tariff setting methodology.

It was, according to Ogaji, also expected to provide a payment assurance facility and World Bank funding, as well as creating a baseline for power generation, transmission and distribution.

“Approximately two years after the PSRP was approved by the Federal Executive Council, the power situation has not experienced the anticipated performance growth.

“As at January, 2019, about two years post launch of the PSRP, most of the activities outlined above had not been implemented. Consequently, the power supply situation in Nigeria has not witnessed the desired change, as was envisaged by the PSRP,” said Ogaji.
She equally explained that: “Even in urban areas where electricity access has been provided, the availability of electricity supply is drastically low, due either to load shedding or inadequate power supply facilities. It is estimated that the Nigerian economy is losing $29.3 billion annually, due to the lack of adequate power.”

“As at 2017, it was estimated that the Nigerian power sector would still require investments of approximately $1.5 billion annually, from 2017 to 2021, to achieve sector viability, with viability predicated on taking the steps, which were outlined in the PSRP,” she added.

She noted that APGC’s research on the performance of the national grid from 2016 to January 2019, showed that in 2016, the grid recorded a total of 28 grid collapses between March and December; seven collapses in January 2017; six in January 2018; and three in January 2019, indicating this was disturbing.