House of Reps says no to N390bn bond to finance power sector

The House of Representatives, on Wednesday, halted the plans of the federal government to raise a N309 billion bond to finance the shortfalls in the the power sector.

The Federal Ministry of Power/Works and Housing had planned to use the Nigeria Bulk Electricity Trading Company to raise the bond.

The House however, called on the Ministry, the Nigerian Electricity Regulatory Commission and Nigerian Bulk Electricity Trading to halt the move to raise the bond, with immediate effect.

A motion moved to this effect by Rep. Edward Pwajok (Plateau-PDP), was unanimously adopted by members through a voice vote.

Pwajok wondered why the bond was needed in spite of the intervention by Central Bank of Nigeria (CBN) in March 25, 2015, through the grant of a bailout to the tune of N213 billion.

“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).

“It rose to a total-market shortfall of N400 billion as at Dec. 31, 2015.”

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

“Market shortfall is a disincentive action for new investors to venture into the Nigerian electricity market, the implication being that the projected generating capacity expansion is an illusion since any increment in generating capacity would further escalate the market shortfall.”

“Also concerned that the Discos, which collect revenues, fail to remit in full to other market participants, without any measures put in place by the Nigerian Electricity Regulatory Commission to block the leakages and there are no sanctions/penalties for defaulters.”

“Disturbed that despite there has being no noticeable improvement in the electricity sector, either in the area of generation, transmission or distribution, tariffs have been increased twice since 2013.”

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