The Federal Government has said about $7.5 billion in funding is needed for the power sector over the next five years, starting from this year till 2021, to make it become viable, THISDAY reports.

If achieved, the funding, which is $1.5 billion per year, would enable diversification of the economy and is estimated to drive growth by at least $29.3 billion annually. The government, which revealed this in the Draft Final copy of the Power Sector Recovery Programme (PSRP), noted that the sector’s viability, however, depended on taking the steps outlined in the plan.

Stating that the power market recorded a shortfall of about N473 billion in 2015 and 2016 with tariff shortfall at approximately N458 billion, the 55-page document noted that, at the current tariff level, even with zero collection losses, the sector shortfall was inevitable. “It is therefore paramount that government provides a subsidy (or similar mechanism) to offset the expected shortfall,” the programme suggested, pointing out that, “the longer it takes to increase tariffs, the larger the market shortfall grows.”

The PSRP document stated that the key objectives of the PSRP are: “To improve power supply reliability to meet growing demand; to strengthen the sector’s institutional framework and increase transparency; to implement clear policies that promote and encourage investor confidence in the sector; and to establish a contract-based electricity market.”