Joseph Bakare
Sahara Power has made a strong case for immediate action to manage the illiquidity crisis plaguing the power sector which is currently preventing projected growth.
The Group Managing Director of Sahara Power, Mr. Kola Adeshina, who made the observation has therefore called for adoption of innovative approaches to tackle the challenge of illiquidity in the power sector.
He said the issuance of promissory notes or bonds by the federal government to restore financial stability of the sector should be taken as a priority step in that direction.
Adeshina made the contribution at the Energy and Infrastructure dialogue convened in Lagos by Udo Udoma & Bello-Osagie (UUBO) law firm, where he also observed that the sector was heavily burdened by the substantial accumulation of unpaid debts owed various stakeholders as well as the non cost-reflective electricity tariff.
Adeshina said the sector was also troubled by limited access to foreign exchange at favourable rate and high inflation and interest rates.
“Issuing promissory notes or bonds is key and central in restoring financial stability, enabling companies to continue to operate and rebuilding the balance sheet of various companies that operate within the power sector.
“It is essential that we begin to redirect funding towards the development of electricity infrastructure. The proximate cost of darkness in Nigeria is under investment,” he said.
He decried the seeming lack of incentive or policy direction that show investors how to recover their investments after injecting funds in the sector.