FG Targets $219m From Sales Of Power Assets

0

CBN

President Buhari reappoints Ben Akabueze as DG Budget office – Nairametrics

 

…budget N300bn for power sector

…makes provision of N37bn to pay MDAs’ debts

 

Olusola Bello

 

The Federal Government is targeting about $291million as revenue from the sales of power assets in the fiscal year 2022. It also plans to spend N300 billion subsidising electricity in the same year.

In Addition to these, the government has also provided about N37 billion for MDAs to pay for their electricity debts.

 

This was made known during the public presentation of the 2022 budget proposal on Friday by Ben Akabueze, director general of the Budget Office.

 

A couple of power assets have been put up for sales for some years now but the government has been facing some challenges in selling them because of lack of availability of gas to the power assets.

Analysts are of the view that the sales might still run into troubled waters if the same challenge of lack of gas still persist.

 

On the provision of N300billion for the power sector in the budget, he said that amount would be used to make up for the shortfall in meeting the revenues of the

electricity industry.

He said there are improvements in the revenue collection rates of the distribution companies but they are yet to meet the threshold needed to make the industry self sufficient.

He said it is true that the governments have 40 of the privatized electricity distribution assets but as shareholder, you don’t receive from the revenue the companies collects but rather you share from the profit they make after they have declared dividend.

He said the billing of the electricity companies are not part of the government revenue.

He said on the contrary because the cost of electricity currently paid does not cover the cost of producing the power

According to him, there is shortfall in tariff which government makes up for on behalf of the citizens. This tariff shortfall he said was projected to be N300 billion in the year 2022 budget.

On the provision of N37 billon to be used to pay for the debt owed the electricity companies by the MDAs, he said, that government is trying to live by example. “we are trying to resolve the historical situation, going forward, there would be a mechanism where MDAs can’t simply incur debts and leave them behind

 

 

The federal Government had said that it would end most of its subsidy payments in the electricity sector, estimated at N30 billion monthly, in 2022.

 

Vice President, Yemi Osinbajo, who disclosed this at the opening of the 14th Nigerian Association for Energy Economics/IAEE conference in Abuja on July 27, said the government expected the electricity sector to generate its revenue from the power sector market.

 

 

“It is anticipated that all electricity market revenues will be obtained from the market with limited subsidy from next year as reforms in metering and efficiency with the DISCOs continue to improve,” Osinbajo said at the time.

 

“Accelerated investment in transmission and distribution, over $3 billion will be put into this sub-segment of the electricity value chain that will put us on the path to delivering 10 gigawatts through the interventions of the Central Bank of Nigeria, Siemens partnership, World Bank and Africa Development Bank, and others,” he said.

Leave a Reply

Your email address will not be published. Required fields are marked *