INDUSTRIAL and commercial consumers are to pay more for every unit of electricity they use. The Nigerian Electricity Regulatory Commission (NERC) will unveil a new tariff regime today, it was learnt yesterday.
The new regime will be extended to residential consumers in six months, the NERC said.
According to its chairman, Dr. Sam Amadi, the new tariff, “is already well known to both the Central Bank of Nigeria (CBN) and the transaction advisers as well as the participants from the deposit money banks.”
Amadi broke the news yesterday in Abuja at the signing of a Memorandum of Understanding (MoU) between the CBN and all the Deposit Money Banks (DMBs) for the N213 billion legacy debt funding for the power sector.
He, however, assured Nigerians that the Commission will “ensure that the tariff is cost-reflective, it will not constitute a burden on consumers immediately and so for avoidance of doubt with this facility, there will be no increase in electricity tariff for residential consumers for six months until we begin to see improvement.”
Essentially, the tariff, Amadi explained “is guaranteed to come into effect tomorrow (today) and it allows for full recovery and ensures that there is no risk that is not fully covered in this transaction.”
He said that NERC expected more gas inflow to the power stations with the injection of N213 billion.
He said: “This facility and other interventions in the next two, three, four months will bring about increase in capacity, there will be more reliability and the metering plan that is ongoing will ensure that consumers will be much more comfortable as they will witness increase in power supply.”
The objective of the N213 billion legacy debt facility was to make the power sector viable and reliable.
Amadi restated the Commission’s commitment to cost recovery by both the CBN and the designated banks in providing the fund and for other investors, who may want to invest either in upstream and downstream of the power sector.
The funding facility, Amadi stated “is about viability and with just 4,000 megawatts worth over N500 billion market, we expect that this facility will deepen the market and ensure not just a good business for the banks but also provide reliable power supply to Nigerian homes.”
CBN Governor Mr. Godwin Emefiele said they were “taking this bold step at this stage to now help the banks, who are themselves going to act as channels through which these funds would be paid to the discos and the GENCOS and the gas suppliers to come in to also sign their Memorandum of Understanding at the Central Bank of Nigeria with the NERC and CBN.”
Nigerian banks, he said, are predominantly the creditors in the books which further demonstrates the commitment of the banks to continue to support the growth of the power sector.
Emefiele stated that the N213 billion power sector intervention fund will ensure that “the least legacy debts that we have are cleared so that the market can be seen to be viable, and electricity can be begin to be generated and distribution improved upon for the good of our people.”
He said that gas tariff was subsequently reviewed to $2.50 whereas transportation was improved to 80 cents, increasing the gas tariff to about $2.80 cents.
Emefiele said the International Oil Companies (IOCs) the gas suppliers, have been assured that the present gas price will be commercially viable.
“Not only that, it will encourage them to improve on the gas production and supply but will indeed also encourage new investors to come into the market and then we can see a boost in the gas production industry in Nigeria,” the CBN chief said.