A proposal by the Minister of Power, Adebayo Adelabu, to invest the N17 trillion pension funds in the power sector has pit organised Labour against the Federal Government.

Adelabu yesterday urged Pension Fund Administrators (PFAs) to infuse the fund into investment in the Nigerian Electricity Supply Industry (NESI).

But the Nigeria Labour Congress (NLC) kicked against the proposal, saying it would amount to the diversion of workers’ retirement benefits.

Adelabu, who spoke at the ministerial retreat on Integrated National Electricity Policy and Strategic Implementation Plan in Abuja, said: “Encouraging our PFAs, who collectively wield over N17 trillion, to delve into understanding NESI and fostering bankable strategies for capital infusion is pivotal.”

He disclosed that there is already an emergence of bilateral contracts between electricity Generation Companies (GenCos) and electricity Distribution Companies (DisCos) alongside the formation of energy investment holding companies.

But the NLC flayed the plan, saying the experiences of retirees before the new pension scheme were unpalatable.

“What we had was a case of monumental tragedy and all manners of humiliation of people who put their time in the service of their fatherland and they died a humiliating death,” the congress said through its Head of Information, Benson Upah.

It added: “Pension funds are money saved by employers for workers to harvest when leaving service. This money is to be used as they exit service by the honour.

“If the government takes this money and these workers are leaving service what will now be available to them? The reason for our migrating from the Defined Benefit Scheme to the Contributory Pension Scheme was because the Defined Benefit Pension Scheme was not funded and when it was funded, borrowing took that money.

“As a way out of this log jam because when it was not funded many pensioners were left to die; many workers exited work without getting their terminal benefits. Many died without those benefits.

“This was one of the major reasons why a decision was taken under the Presidency of Chief Olusegun Obasanjo to migrate from the Defined Benefit Pension Scheme to the Contributory Pension Scheme. So that as you exit service you get paid what is due to you and the balance is managed for you by your pension fund administrator.

“If the government decides to go after this money, what happens to the fate of people exiting service?”

Adelabu had at the retreat also sought deliberations of the stakeholders on how to handle subsidies, cross-subsidies, and aligning the Rural Electrification Agency’s role with emerging state markets.

According to him, there should be a conversation on transition energy to ensure that over 98 percent of electricity generated in Nigeria is through clean or transition fuels as “we strive to achieve net zero CO2 emissions by 2060.”

He added that the ministry would love to see more renewable energy-driven power plants by 2030 that are localised around clustered communities as well as a stabilised national grid capable of transmitting generated power over long distances with minimal losses.

Adelabu also said there should be a deliberate and definitive model of human capacity development that would support all aspects of policy-making, regulation and operation as well as the maintenance of various assets, plants and equipment across the value chain.

He said the low impact of NESI since the EPSRA 2005 and 2013 privatisation of the power sector included poor track record in contracting, contract management, and ineffective adherence to contractual obligations.

Adelabu recalled that a Risk-Mitigated Domestic Gas-to-Power Market as at 2022, showed that “70.5 percent of our grid electricity was generated by thermal plants, 27.3 percent from hydro, whilst solar and other power plants made up 2.2 percent.”

He however said the good news is that over 98 percent of the feedstock powering electricity generation in the country is transition or clean fuels.

The minister further stressed that a major issue in the sector is the pricing of gas used by the GenCos in dollars.

His words: “A more preferable option is to ensure that the gas utilised by the GenCos is traded in Naira to better manage the foreign currency related inflationary trends that challenge the faithful application of the Multi-Year Tariff Order (MYTO) methodology.

“While we appreciate the interplay of contractual obligations, economics and the application of the Petroleum Industry Act, it must also be said that, as a matter of urgent national interest and economic survival, we must find ways and means to pursue domestic gas policies and incentivise stakeholders for the supply of gas for inland use in electricity supply, other industrial activities, and conversion to CNG and LPG for transportation and domestic uses respectively.” (The Nation)

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