Nigeria: World Bank To Revive Power Sector With $1.75bn

Nigeria’s power sector got a lift yesterday with a pledge by the World Bank to commit $1.75 billion, over the next four years, to support reform in the industry. The bank’s Country Energy Task Team Leader for Nigeria, Mr. Eric Fernstrom, said at a capacity building programme on Post Privatisation Monitoring for the Power Sector, jointly organised by the multilateral financial institution and the Bureau of Public Enterprises (BPE) in Uyo, that the $1.75 billion was 25 per cent of a total of $7 billion earmarked for Nigeria in the next four years.
According to him, the bank is encouraged to offer the additional assistance to ensure that the reform objectives are realised as a result of the transparency exhibited in the transaction process and the robust post reform measures put in place by the National Council on Privatisation (NCP) and BPE.
He made the commitment just as the Electricity Regulatory Commission (NERC) is set to release today a new regime of electricity tariff for consumers. The two-day workshop on power reform, held in Uyo sought to expose participants to the techniques, methods and information sources for effective postprivatisation monitoring and evaluation of the Power Holding Company of Nigeria (PHCN) successor- companies.
World Bank
The workshop was also meant to enable participants analyse performance targets using relevant tools as well as expose them to strategies for effective engagement and collaboration with relevant stakeholders. BPE Director General, Mr. Benjamin Dikki, represented by Director of Post- Privatisation Monitoring Department, Mr. Ibrahim Kashim, said the workshop had increased the capacity of the participants to effectively monitor power companies.
Also yesterday, NERC Chairman, Dr. Sam Amadi, said the commission was ready to release the new electricity tariff today. Although he declined to give details of the new tariff structure, he said one of its key provisions was that residential consumers would be shielded against tariff increment for six months.
Amadi spoke in Abuja at a signing of Memoranda of Understanding (MoU) on power spearheaded by the Central Bank of Nigeria (CBN) for Deposit Money Banks (DMBs) and stakeholders in power sector. Amadi said: “While we ensure that tariff is cost reflective, it will not constitute a burden on consumers. For the avoidance of doubt, there will be no increase for residential consumers for at least six months until we begin to see improvement.
We expect that with more gas coming to the power plant because of these facilities and other interventions, in the next two three months, there will be increase in capacity, there will be more reliability and the metering plan that is ongoing. We will be able to ensure that consumers will be much more comfortable. NERC will ensure that we will approve the tariff by tomorrow (today) which is already well known to the CBN and the transaction advisers as well as the participants from the Deposit Money Banks. That tariff is guaranteed, it is going to come into effect by tomorrow”.
Earlier, CBN Governor, Mr. Godwin Emefiele, had recalled that the MoU was to seal an earlier agreement that was conceptualised last month by stakeholders, including the Ministry of Petroleum Resources, Ministry of Power, gas operators, Gencos and Discos and the banks aimed at finding efficient ways of providing stable power supply to both residential consumers and manufacturers. Yesterday’s MoU was a follow-up to the November pact with power firms for the provision of N213 billion loan under the Nigerian Electricity Market Stabilisation Facility. “Basically, the MoU is between us and those who supply this electricity for our consumption.
We are taking this bold step at this stage now to get the banks who themselves act as channels through which this fund will be paid to the Discos and the Gencos and the gas suppliers to come in to also sign their MoU,” he said. Emefiele described the occasion as a bold step that further demonstrates the banking sector’s commitment towards supporting government’s efforts at resolving the power problem.
“I must commend Nigerian banks for having done an excellent job this time by taking the bold step to fund the Gencos as well as the Discos in their assets as well as acquisition project. I am aware that the Nigerian banks are the creditors of these institutions. This further demonstrates the commitment of the banking industry to continue to support the growth of the power sector in Nigeria,” he added

Author: News Editor

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