Federal Government Budgets N450bn Power Intervention Fund

In 2024, the Nigerian Federal Government plans to invest N450 billion in power interventions.

This aligns with the budget analysis provided by the Nigerian Bulk Electricity Trading Company. For the “FGN Power Intervention Fund,” N450 billion was set aside under the company’s capital expenditure budget.

In 2024, the Government Owned Enterprise plans to spend a total of N454.81 billion.

The following costs are expected to be incurred: N2.44 billion for personnel; N2.36 billion for other recurrent costs; N580 million for general travel and transport; N15 million for utilities; N110 million for materials and supplies; N210.75 million for general maintenance services; N34 million for other services; N60 million for fuel and lubricants; N40 million for financial charges; N576 million for miscellaneous; and N736.51 million for supplementary overhead.

In the New Year, the majority of the company’s expenditures would go toward power intervention funds. The Federal Government’s intervention fund for energy distribution companies increased to N2.9 trillion as of May 2022.

A report published by The PUNCH states that since the industry was privatized in 2013, N2.9 trillion has been provided in funds. The federal government has continuously meddled in the energy industry. In order to pay the generating companies for two years, the Nigeria Bulk Electricity Trading Company was granted a Power Assurance Guarantee of N701 billion by the Federal Executive Council in 2017.

In 2019, the government announced that the power sector was going to get another intervention of N600bn. In 2019, the Market Operator, Transmission Company of Nigeria, Edmond Eje, stated, “At this stage I’ll tell you that it is for the market. If the money is injected into the Gencos, it is for the market; if it is injected into the Discos, it is for the market. It is generally for the shortfall in the payment of monthly invoices.”

Numerous grid breakdowns have plagued the power sector despite these intervention funds. The House of Representatives declared in October 2023 that it will look at every financial intervention made by the federal government in the power industry over the previous ten years.

It stated that the inquiry would encompass the more than $1.25 billion that the government has invested in the industry since the 2013 privatization to the present.

A House of Rep member, Ademorin Kuye (APC, Lagos), said while moving the resolution, “The Nigeria Electricity Regulatory Commission performance as an industry regulator is questioned for its ability to move the industry forward and eliminate illiquidity.

“The Nigeria Electricity Supply Industry faces threat due to the poor performance and transparency of DISCOs and the NERC’s inability to sanction erring stakeholders.”

In its New Year statement, the Lagos Chamber of Commerce and Industry noted that bringing private sector investment into the transmission segment of the power sector would help improve the sector.

It said, “The government needs to consider bringing private sector investment into the transmission segment of the power sector. This would ensure adequate technical and financial capacity for a well-functioning sector to power economic growth.”

Leave a Reply

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