Darkness Looms in Nigeria as Power Investors Threaten to Pull Out
Posted by admin | 8 years ago | 2,399 times
Nigeria’s power sector, according to Quartz, faces a looming catastrophe as investors have threaten to pull out of the country.
The country’s power sector saw a major reform in December 2013, with distribution companies privatized. Many hoped that the entry of investors into the sector would improve power generation and distribution across the country and perhaps reduce Nigerians’ reliance on private generators which cost three times as much as direct supply.
However the country remains in darkness with investors now threatening to leave the country over government’s alleged failure to adhere to contractual terms. They said this hindered them from carrying out their duties.
They are now requesting refunds on their commitments which are pegged at more than $130 million since 2013.
Among the reasons for the threatened pull-out from the sector is a backlog of debt totaling $226 million incurred by government agencies. Government offices as well as the National Assembly and the military bases have not paid their electricity bills since the privatization of the sector in 2013, they said.
They also aren’t happy with a controversial tariff increase which they claim could wipe out profit margins.
From next month, the Nigerian Electricity Regulatory Commission (NERC) will introduce new electricity tariffswhich will replace fixed charges as power users will only pay for electricity they consume.
Nigeria needs an estimated 156,000 MW to achieve its growth potential but currently struggles to generate 4,000 MW. The country is however looking into solar power generation to make things better.