Nigeria's power sector injects additional investment

Nigeria's power sector is facing significant challenges as it grapples with losses due to constraints associated with grid and gas. According to Nigeria's presidential advisory power team, the country's power sector lost 1.43 billion Naira on the 17th of June. This loss is attributed to disruptions in electricity flow and gas supply, resulting in a loss of 1,200 megawatts of power generation. Additionally, stakeholders in the sector have identified the need for $7.7 billion in additional investments to ensure uninterrupted power supply in the country. Tunde Gbajumo, Managing Director of Powergen Advisers, highlighted the impact of these losses, emphasizing that the quantification of the financial implications of power disruptions serves to raise awareness about the urgent need to address the challenges facing the sector. He underscored the importance of addressing issues such as outstanding payments, electricity theft, and tariff adjustments to ensure the viability of the power sector. One of the key concerns raised during the interview was the issue of electricity theft and outstanding payments within the sector. Gbajumo highlighted a significant deficit of 1 trillion Naira due to unpaid gas and generation bills, underscoring the need for a comprehensive approach to address financial discrepancies within the value chain. He also emphasized the importance of implementing the Power Sector Recovery Program, developed in collaboration with the World Bank, to address systemic challenges and improve the sector's financial sustainability. Discussing the recent introduction of eligible customer initiatives in the sector, Gbajumo acknowledged the potential short-term challenges for distribution companies but emphasized the long-term benefits of competition and network expansion. He noted that while some stakeholders may be unhappy with the changes, the initiatives are essential for enhancing service delivery and revenue generation within the sector. The conversation also touched on the issue of prepaid meters and the government's efforts to phase out estimated billing. Gbajumo highlighted the government's procurement of 3 million meters to address metering challenges in the sector. He emphasized the importance of ensuring transparency and accountability in the distribution of meters to consumers, noting the need for effective regulatory oversight to protect consumers' interests. In conclusion, Gbajumo expressed optimism about the sector's prospects, citing ongoing initiatives and programs aimed at addressing key challenges and improving the power sector's resilience. He called for collaborative efforts between stakeholders, regulators, and government agencies to drive sustainable growth and development in Nigeria's power sector.