Verheijen: FG Will Close Metering Gap, Address Illiquidity in Power Sector
The federal government yesterday pledged to close Nigeria's power sector metering gap as well as address the financial liquidity challenges besetting it.
The Special Adviser on Energy to President Bola Tinubu, Olu Verheijen, gave the assurance during a session at the 2024 edition of CERAWeek by S&P Global holding in Houston, the United States.
The session with themed: “Energising Tomorrow: Charting a Successful Path for Africa's Energy Transition,” and was moderated by the Research and Analysis Executive Director, S&P Global, Paul McConnell.
Nigeria, a country of over 200 million people has for decades been unable to significantly ramp up power supply, only depending on about 4,000mw daily for the numerous homes and businesses in the country.
But speaking at the session, Verheijen said the federal government was working on a number of initiatives to decentralise transmission and make sure that it is closer to the markets in which there's demand for electricity.
Besides, on the distribution side, she explained that there were different technologies that the government was using to make sure there is more supply of electricity, especially to high consuming customers.
The Presidential Adviser explained that a lot of creative initiatives were being implemented to de-risk the power sector in Nigeria, given the fact that the government is currently faced with fiscal constraints.
She said that while the International Energy Agency (IEA) had estimated an investment gap of $190 billion, the government may not be able to raise such funding considering the tight fiscal environment currently.
However, she explains that despite the constraints, a lot of initiatives were being implemented to unlock the potential in the sector.
“So, if you look at this scale of investments that are required, you know, some entities like IEA have estimated about $190bn a year, but we don't have the fiscal space for that.
“So, what are we trying to do is to make sure we are able to scale faster? We are making sure that we actually creatively target certain aspects that we think are catalytic to the rest of the entire value chain.
“So, we launched a presidential initiative recently. What are we using that to do? We say we need about $10 billion to double our transmission capacity, we don't have that, but maybe we have a fraction of that.
“We can actually then make sure we procure meters, convert all of the 6 million customers that we currently have into paying customers with digital technology and smart meters and make sure we grow revenue that way.
“If we grow that revenue, then we're able to make sure that we improve the financial viability of this public utilities and attract capital. So, that's an example of how we're being extremely strategic about the level of interventions that we have within our limited fiscal space.