In 2024, the Federal Government plans to invest N450 billion on power-related initiatives.
This is based on the Nigerian Bulk Electricity Trading Company’s budget analysis. N450 billion was set aside for the “FGN Power Intervention Fund” as part of the company’s capital expenditure budget.
In 2024, the government-owned enterprise plans to spend a total of N454.81 billion.
The following expenses are projected to be incurred: N2.44 billion for personnel costs; 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, power intervention funds would account for the majority of the company’s expenditures. The amount that the federal government provides to electricity distribution companies as an intervention fund increased to N2.9 trillion as of May 2022.
Since the sector’s 2013 privatisation, a total of N2.9 trillion has been provided. Power industry interventions by the federal government have been ongoing. For the Nigeria Bulk Electricity Trading Company’s two-year payment to the generating firms, the Federal Executive Council approved N701 billion as a Power Assurance Guarantee in 2017.
The government declared in 2019 that it would again intervene N600 billion in the power sector. The Nigerian Transmission Company, Edmond Eje, the market operator, declared in 2019 that, “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.”
The Nigerian House of Representatives has announced a probe into all financial interventions by the Federal Government in the power sector over the past decade, covering over $1.25bn since 2013.
The investigation will focus on the Nigeria Electricity Regulatory Commission’s performance as an industry regulator and the threat posed by poor performance and transparency of DISCOs and the NERC’s inability to sanction erring stakeholders.
The Lagos Chamber of Commerce and Industry has also suggested that private sector investment in the transmission segment of the power sector could help improve the sector and ensure adequate technical and financial capacity for a well-functioning sector for economic growth.