Power sector: Minister reveals when new tariff will take off

Nigeria’s Minister of Power, Sale Mamman on Tuesday revealed that the increment in electricity tariff would commence in July this year.

Lamenting how COVID-19 pandemic disrupted the laid out plan of the electricity subsecror, the Minister explained that the situation has posed a big challenge to the repositioning of electricity market towards a financial sustainability of the power sector.

Speaking on Tuesday in Abuja during the Investigative Public Hearing on Power Sector Recovery Plan and the impact on COVID-19 Pandemic, organised by the Senate Committee on Power, he maintained that they were committed to the Power Sector Recovery Programme which has been put in place before the outbreak of the pandemic.

He noted that the regulator, having completed the public consultation on tariff review, would have kickstarted the tariff review in April 2020, before the disruption, adding that it has to delay due to the customers’ apathy occasioned by the disease.

He said, “The impact of this means the subsidy being incurred in maintaining the current tariff level had to be maintained till July 2020 when the proposed tariff review will be implemented.

“The challenge we are currently facing in the development and expansion of our transmission line is budget and release of Federal Government’s commitment in the estimated sum of N32bn primarily for Right of Way acquisition and environmental impact mitigation.

“The fund should be provided for in the 2020, 2021, and 2022 Appropriation of the Ministry of Power,” he added.

Sale said the outbreak of COVID-19 negative impact was beyond the health sector, but on all sectors of the economy as well as the reduction in productivity due to the strategy adopted globally to contain it.

“This by default affects the purchasing power of consumers and the demand for electricity.

“The current situation in the Nigerian Power Sector is that a lot of capital investment is being made, most of which is dependent on donor funding, loans and budgetary allocation.

“For projects that we have already secured their funding, we do not expect any adverse effect.”

According to the Minister, the Ministry of Power was already looking outside the box to source for counterpart funding for projects that are of immense value to the economy in the face of dwindling National revenue.

“This explains our prayer for the Distinguished Senators to consider and approve additional funding for the execution of the various projects we are undertaking, he said.

He added that the power sector was also grappling with the challenge of infrastructural misalignment, market inefficiency/transparency, sector governance/policy coordination, increase energy access and completion of legacy projects.

He said, “Note that the teething issues as well as the legacy issues affecting the power sector is primarily an issue of infrastructural deficit and lack of coordination in the sector.

“We believe solving two challenges alone, would not only redress these challenges, but will also unlock the Sector for investment, efficiency and service delivery, bringing affordable and stable power to the nation.

“It is thus fortuitous that President Muhammadu Buhari has championed the Siemens Electrification Plan under the Presidential Power Initiative, as the central theme of the Government’s strategy in the Sector.

The Minister believed that all the stakeholders contribution would be aligned with the PPI for optimum effectiveness in implementation, noting that the nation has no choice than to solve the longstanding issue of the Power Sector.”