The Nigerian Bulk Electricity Trading Company (NBET) will spend N450 billion as capital expenditure on power interventions this year, according to the 2024 federal budget.
The agency intends to spend N454.81 billion with the additional sum budgeted for recurrent expenditure, which covers personnel costs (N2.44 billion), and other recurrent costs (N2.36 billion).
The “other recurrent costs” include general travel and transport (N580 million), utilities (N15 million), materials and supplies (N110 million), general maintenance services (N210.75 million), other services (N34 million), fuel and lubricants (N60 million), financial charges (N40 million), miscellaneous (N576 million), and supplementary overhead (N736.51 million).
Most of the firm’s spending would be on power intervention funds in the 7ear. As of May 2022, the Federal Government’s intervention fund to electricity distribution companies totalled N2.9 trillion.
According to The PUNCH, the N2.9tn is the total funding extended to the sector since privatisation in 2013.
The Federal Government has consistently intervened in the power sector. In 2017, the Federal Executive Council approved N701 billion as Power Assurance Guarantee for NBET for two years to pay the generation firms.
In 2019, the government announced that the power sector was going to get another intervention of N600 billion. In 2019, the Market Operator, Transmission Company of Nigeria, Edmond Eje, stated that: “At this stage I’ll tell you that it is for the market. If the money is injected into the Gencos, it is for the market; if it is injected into the Discos, it is for the market. It is generally for the shortfall in the payment of monthly invoices”.
Despite these intervention funds, the power sector has been besieged with many grid collapses. As last October, the House of Representatives stated that it was set to probe all financial interventions by the Federal Government in the power sector in the past 10 years.
It said the investigation would cover over $1.25 billion injected into the sector by the government since the 2013 privitisation till date.
While moving a motion, House of Representatives member, Hon. Ademorin Kuye (APC, Somolu, Lagos) said: “The Nigeria Electricity Regulatory Commission performance as an industry regulator is questioned for its ability to move the industry forward and eliminate illiquidity.
“The Nigeria Electricity Supply Industry faces threat due to the poor performance and transparency of DISCOs and the NERC’s inability to sanction erring stakeholders”.
In its New Year statement, the Lagos Chamber of Commerce and Industry noted that bringing private sector investment into the transmission segment of the power sector would help improve the sector.
It said: “The government needs to consider bringing private sector investment into the transmission segment of the power sector. This would ensure adequate technical and financial capacity for a well-functioning sector to power economic growth”.
