Core investors in the privatised power firms are beginning to speak up as the debate on plans to reverse the hike in electricity tariff heightens.
For the first time since the sector was privatised in November 2013, the real investors, not just the managing directors or chief executive officers of the privatised generation and distribution companies, have agreed to meet with the Nigerian Electricity Regulatory Commission to discuss issues affecting the power tariff.
It was gathered that the meeting, which holds in Abuja today (Thursday), will also discuss other issues that had hampered the progress of the sector for about three years since it was officially handed over to private sector players.
The investors also argued that the amount paid as tariff by consumers would reduce as soon as Nigeria starts generating more power, stressing that reversal of the recent hike in electricity rates was counterproductive to the business.
The Chief Executive Officer/Managing Director, Copperbelt Energy Corporation, Africa, a core investor in the privatised Abuja Electricity Distribution Company, Mr. Emmanuel Katepa, said the AEDC had been recording losses in the last two years as a result of inadequate tariff, although the loss had been reducing.
He said, “Our projection at the beginning of this year was that we were going to break even by December. Unfortunately, developments in the market are really threatening that projection. We are dependent on the tariff and it is important to let consumers know that the more energy that comes into our system, the lower the tariff can be.
“We had a tariff increase last year and we had one this year as well. It was on assumptions of the country’s generation capacity that we made projections to break even. But generation has been less than half this year and there has been a significant resistance from the paying public on the new tariff, which obviously puts the whole model in some level of concern.”
Katepa noted that the first two years post-privatisation was virtually lost as there was not much development in the sector due to the face-off between investors and the regulator.
“I tend to think we lost two years in the sector for development because of the standoff between operators and the NERC. By the beginning of this year, things started looking better, but for the two years past, we could not move on many critical issues,” he said.