The 2017 budget is capable of revamping the country’s ailing power sector if it is adequately implemented, according to the operators in the sector.
According to them, the Federal Government’s decision to include the outstanding debts owed the power firms in the 2017 budget is a step in the right direction, considering the over N800bn liquidity gap in the sector.
This is coming as the Abuja Electricity Distribution Company on Thursday inaugurated its N45.75bn free mass metering project that will see to the distribution of 300,000 meters to power consumers in its catchment areas.
As part of the Federal Government’s plan to expand infrastructure, it allocated N529bn to the Ministry of Power, Works and Housing for capital projects for next year, up from the N433.4bn total allocation to the ministry in 2016.
Commenting on the development during the inauguration of the mass metering project, the Board Chairman, AEDC, Ambassador Shehu Malami, said the approval for defrayal of the outstanding debts by Ministries, Departments and Agencies of government was announced by President Muhammadu Buhari while presenting the 2017 budget proposal to the National Assembly last week.
He said, “This is a bold and lifesaving move and we commend Mr. President for that budgetary provision, and also call on the National Assembly to expedite action on the budget, as its content is a livewire for the power sector in Nigeria.
“We are also optimistic that once the budget is passed into law, funds will be released by the appropriate agency of government on a deduction from source basis. It should be a first line charge. We have had substantial interaction with the appropriate agencies of government on this matter, including the Minister of Power, Works and Housing, Babatunde Fashola.”
Buhari had explained that in the course of this year, the government conducted a critical assessment of the power sector value chain, which is experiencing major funding issues.
The President had said, “Although the government, through the CBN and other development finance institutions had intervened, it is clear that more capital is needed. We must also resolve the problems of liquidity in the sector.
“On its part, government has made provisions in its 2017 budget to clear its outstanding electricity bills. This we hope, will provide the much needed liquidity injection to support the investors.”
Also speaking on the issue, the Chief Executive Officer, Association of Nigerian Electricity Distributors, an umbrella body of the Discos, Mr. Azu Obiaya, said it was a welcome development for the government to come up with ways of addressing the financial shortfall in the sector.
“For us, it is progress and a step in the right direction. As you know, we have continued to be concerned about the significant industry shortfall that we’ve been experiencing. So, since the government has recognised that part of ways of addressing this shortfall is by clearing the MDAs’ debts, then it is very welcoming,” he stated.
On the metering project, Malami stated that the AEDC would meter residential as well as and other customers who belonged to the small power users’ group.
“Before now, we had undertaken the metering of the maximum demand customers or large power users, and that project is expected to be completed by the end of this month. As a company, this metering project will cost us $150m and it will span three years, covering a customer population of over 300,000,” he said.