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GenCos say call for reversal of power privatisation premature

By Kingsley Jeremiah, Abuja
10 June 2020   |   4:10 am
Power Generation Companies in Nigeria (GenCos), have described the call by the Senate to cancel the privatisation exercise of the power sector as premature.

• Proffer solutions to sector woes
Power Generation Companies in Nigeria (GenCos), have described the call by the Senate to cancel the privatisation exercise of the power sector as premature.

Instead of compounding the challenges in the sector, the GenCos, in a document, which detailed their performance and challenges insisted government would do better by addressing the structural issues bedevilling the sector.

“It is very pertinent to state that the reversal of the privatisation exercise of 2013 is not the solution to resolving the current abysmal state of the sector,” the group said.

Being a recurring debate since the administration of President Muhammadu Buhari came to power, just last month, the Senate President, Ahmed Lawan, during the deliberation of a motion on Nigeria’s power sector recovery plan, and the impact of the COVID-19 pandemic, said that power sector privatisation has failed, and called for its review.

Lawan’s comment came in the wake of massive public outcry over the inefficiency of the power sector to provide electricity to Nigerians since it was privatised in November 2013, with the distribution and generation sub-sectors split and sold to private owners. One of the aims of the split was to enhance power distribution in the country, as only the transmission component, through the Transmission Company of Nigeria (TCN), remains a public property.

The GenCos said a vibrant and efficient Nigeria Electricity Supply Industry (NESI) remained a priority, there was need for urgent review of the Electric Power Sector Reforms Act (EPSRA), the Multi-Year Tariff Order, Orders made by Nigerian Electricity Regulatory Commission as well as Policies, Market Rule and other governance document in the NESI.

The power companies under the umbrella of Association of Power Generation Companies (APGC) also called for a viable and independent stress test on the generation, distribution and transmission capacities to enable the sector plan proactively and build the industry sustainably.

They also demanded the immediate separation and unbundling of the Independent System Operator (ISO) and Transmission Service Provider (TSP) from the existing Transmission Company of Nigeria (TCN) to drive efficiency in the wheeling and allocation of power.

The group also noted the need for local or foreign guarantees (backed by World Bank/AFDB) to enhance guaranteed payment plan for GenCos to enable them improve generation and implement expansion plans (for power growth).

According to the association, there is need to ensure transparency in the billing, collection and remittance as well as development of a viable metering framework to improve collection efficiencies.

“GenCos are of the position that there is need for a coordinated approach by all stakeholders in the NESI to realistically and sustainably address issues of the power sector so that Nigerians can have access to reliable electricity supply.

“As GenCos, we empathise with Nigerians on the current abysmal situation of electricity supply to individuals and the industrial community as well as the attendant effects, this has on the costs of goods and services. We also understand that this may have led to the frustration expressed by the Senate in calling for an outright cancellation of the privatization of the Power Sector,” GenCos stated.