Minister of finance, budget and planning, Zainab Ahmed, has disclosed that the N1.3 trillion intervention fund the federal government provided for the power sector has not yielded any significant result.
The presidentMuhammadu Buhari-led federal government had on March 1, 2017, approved the sum of N701 billion as a power assurance guarantee fund for the Nigerian Bulk Electricity Trader (NBET) to pay for the electricity produced by the generation companies (GenCos) to the national grid for the period of two years.
In a letter to Buhari dated November 19, 2021, the minister of finance, detailed how funds can be raised through the sale of make-up gas to address the financial challenges in the sector.
She wrote: “The industry requires N85 billion per month to pay for gas, generation, transmission and distribution operations,”
“Recent intervention (between 2017-2019) towards addressing the power sector problem includes the 701 billion and 600 billion payment assurance facilities (PAFs) secure from Central Bank of Nigeria (CBN) to take care of some of the FG contingent liabilities within the sector and which have not yielded significant result.
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“Shortfalls caused by the large difference between allowed tariffs and what is required for cost recovery cost the FGN a total sum of N1.249 Billion between 2017 to 2019. These resources are more needed for human capital development and infrastructural investment. The above includes some projects like the World Bank loan (up to $3 billion) for tariff shortfall and the euro 2.6 billion for the presidential power initiative is considered to support Nigerian Electricity Supply Industries (NESI).”