Reps Kicks Against FG’s Plans to Raise N309Bn Bond For Electricity Bailout

Posted by African Examiner Featured, Latest Headlines, News Wednesday, April 27th, 2016

Ayodele Afolabi, Abuja

The House of Representatives on Wednesday stopped the plan to raise a Federal Government secured bond of N309 billion to finance the alleged shortfalls in the Nigerian Electricity Market.

The House also called on the Federal Ministry of Power, Works and Housing and the Nigerian Electricity Regulatory Commission, Nigerian Bulk Electricity Trading (NBET) to immediately stop the move to raise the bond.

The decision followed a motion by Edward Pwajok (Plateau-PDP), which was unanimously adopted by members through a voice vote.

Moving the motion, Pwajok expressed concern that the planned massive borrowing was in spite of intervention by Central Bank of Nigeria (CBN) in March 25, 2015 through the grant of a bailout.

According to him, the bailout was to the tune of N213billion through the Nigerian Electricity Sector Intervention (NESI) facility.

“In spite of that intervention, the shortfall, instead of being wiped out, has continued to escalate at the rate of about N15 billion per month (equivalent to N500 million daily).

“Rising to a total-market shortfall of N400 billion as at December 31, 2015.

“A continuing incidence of market shortfall is a distinctive action for new investors to venture into the Nigerian electricity market.

“The implication being that the projected generating capacity expansion is an illustration since any increment in generating capacity would further escalate the market shortfall,’’ he said.

Pwajok also noted that Distribution Companies (DISCOs) which collected revenues failed to remit in full to other market participants without any measures put in place by the Nigerian Electricity Regulatory Commission (NERC) to block the leakages.

He added that there were no penalties for defaulters.

The lawmaker also concerned that in spite of no noticeable improvement in the electricity sector, either in the area of generation, transmission or distribution, tariffs had been increased twice since 2013.

Contributing to the motion, Chris Azubogu(Anambra-PDP) said that the NERC was not doing much adding that year in year out it seek for bailout from the Federal Government.

Also Johnson Agbonayinma (Edo-PDP) said, “this is a total failure to the Nigerian people.

“There is a lot of question to how the bailout to the tune of N213 billion through was utilized.

“We need to call on the CBN Governor to come and explain what the N309 billion bond will be used for,’’ he said.

Rep. Babajimi Benson (Lagos-APC), also said that the CBN Governor, the Minister of Power, Works and Housing should be invited to justify why there should need to borrow N309 billion for the bail out.

Also contributing, Wale Raji (Lagos-APC), said that Nigerians were being subjected to darkness at huge cost as citizens cannot continue to subsidise the electricity supply tariffs.

Sadiq Ibrahim (Adamawa-APC), speaking against the motion, said that the Nigerian Government owned 40 per cent of DISCOs and Generating Companies (GENCOs).

“We are investing in ourselves as a nation if the bond is approved, it is highly technical.

“It will be sending wrong signals to new investors if not approved and we must do all to savage the companies for the good of the nation,’’he said.

The house urged NERC to devise a monitoring mechanism to measure and enforce full monthly remittance by DISCOs, recoup all miss-appropriated funds that resulted in the accumulated market shortfalls.

According to the house NERC should also apply sanctions for any defaulter including the threat to withdraw the licenses of erring DISCOs.

The house further mandated its committee on Power, Privatisation and Commercialization and Aids, Loans and Debt Management to investigate the matter and report back to the house within six weeks.