Nigeria stands to lose $1.2 billion if it pulls out of an agreement with Azura Power, an Africa Independent Power Plants(IPPs) that supplies 450 megawatts of electricity used monthly.
The chairman of the Committee, Gabriel Suswam during a debate on Nigeria’s Electricity sector problems disclosed that Nigeria signed a Take or Pay Agreement with Azura Power with a clause that $1.2 billion could be pulled out of Nigeria foreign Reserve if Nigeria defaults.
The Adhoc committee investigating the privatization process of the power sector came up with a report which the chairman presented during Wednesday penury section.
Some of the resolutions recommended in the report include:
- The introduction of Cost Reflective Tariffs
- Immediate removal of increased customs duties of 35% to allow meter assets provider clear meter stuck at the Airport
- Elimination of political interference from NERC
- Alignment of the electricity value chain
The Committee further notes that the insolvencies in the Nigeria power sector can dissuade investors from investing in the country, stressed the need for government to provide subsidy for the sector.
Some senators argue that constant electricity could be a mirage in Nigeria considering the current challenges in the Nigeria power sector.
Senator Sam Egwu also contributed to the debate, lamenting on the failures in the power sector, describe the privatization process as faulty and highly compromised.
As a way of bridging the gap in remittances to the Nigerian Electricity Regulatory Commission(NERC), the upper chamber urged ministries department and Agencies of Government(MDAs) to cave out all outstanding debts and liabilities owed to the distribution companies in the 2021 budget.
It also called on the Federal Government to consider recruiting more manpower for the Nigeria Electricity Management Services Agency(NEMSA) to inspect all categories of Electrical installation across the country.
