Introduction
Following the privatisation exercise that took place in the
Nigerian power sector, investors that took over the power assets
have been unable to realise a return on their investments. Many
took loans from banks to finance the acquisition of these assets
and their operations thereof, and have failed to meet up with their
loan repayments due to a host of reasons including the adoption of
a non-cost-reflective tariff.
In a bid to avert a crisis and promote commercial viability and
further investment in the power sector, the NERC implemented a 45
per cent tariff increase, which came into effect on February 01,
2016. The tariff increase was however nullified by a recent
decision of the Federal High Court (FHC) and has thus generated
mixed reactions considering the controversial nature of the
circumstances leading to the increase. Whilst organized labour has
hailed the decision of the Court, others, mostly energy industry
practitioners, have criticized it.
