The House also called on the Federal Ministry of Power, Works and Housing and the Nigerian Electricity Regulatory Commission (NERC), Nigerian Bulk Electricity Trading (NBET) to immediately halt the move to raise the bond.
This move followed a motion raised by Edward Pwajok (PDP, Plateau) and adopted by a majority of members through a voice vote.
Moving the motion, Pwajok expressed concern that the planned massive borrowing was in spite of earlier intervention by the Central Bank of Nigeria (CBN) on March 25, 2015 through a bailout.
According to him, the bailout was to the tune of N213 billion through the Nigerian Electricity Sector Intervention (NESI) facility.
He said: “In spite of that intervention, the shortfall, instead of being wiped out, has continued to escalate at the rate of about N15 billion per month (equivalent to N500 million daily) rising to a total-market shortfall of N400 billion as at December 31, 2015.
“A continuing incidence of market shortfall is a disincentive for new investors to venture into the Nigerian electricity market.
“The implication being that the projected generating capacity expansion is an illustration since any increment in generating capacity would further escalate the market shortfall.”
Pwajok also noted that Distribution Companies (DISCOs) which collected revenues failed to remit in full to other market participants without any measures put in place by the NERC to block the leakages and that there were no penalties for defaulters.
The lawmaker also expressed concern that in spite of no noticeable improvement in the electricity sector, either in the area of generation, transmission or distribution, tariffs had been increased twice since 2013.
Various members lent weight to the motion.
Chris Azubogu (PDP, Anambra) said the NERC was not doing much adding that year in year out it seeks for bailout from the Federal Government.
Also, Johnson Agbonayinma (PDP, Edo) said the situation signals a total failure to the Nigerian people, saying “there are a lot of questions to how the bailout to the tune of N213 billion was utilized.
“We need to call on the CBN Governor to come and explain what the N309 billion bond will be used for.”
Babajimi Benson (Lagos-APC), equally stated that the CBN Governor, the Minister of Power, Works and Housing should be invited to justify why there should need to borrow N309 billion for the bail out.
Wale Raji (Lagos-APC) said that Nigerians were being subjected to darkness at huge cost as citizens cannot continue to subsidise the electricity supply tariffs.
Despite the overwhelming support for the motion, Sadiq Ibrahim (APC, Adamawa) voted against the motion. He said that the Nigerian Government owned 40 per cent of DISCOs and Generating Companies (GENCOs).
According to him, “we are investing in ourselves as a nation if the bond is approved, it is highly technical. It will be sending wrong signals to new investors if not approved and we must do all to savage the companies for the good of the nation.”
The House however urged NERC to devise a monitoring mechanism to measure and enforce full monthly remittance by DISCOs, recoup all misappropriated funds that resulted in the accumulated market shortfalls.
According to the lawmakers, NERC should also apply sanctions for any defaulter including the threat to withdraw the licenses of erring DISCOs.
It however mandated its committee on Power, Privatisation and Commercialization and Aids, Loans and Debt Management to investigate the issue and report back to the house in six weeks.