Reps move to earmark 5% electricity revenue for host communities

Written by on July 8, 2021

The House of Representatives, yesterday, resolved to reserve five per cent of revenues accruing from power generated from power generating companies for the development of host communities.

A bill aimed at achieving the objective scaled the second reading at plenary presided over by Speaker of the House, Femi Gbajabiamila.

Sponsor of the bill, Babajimi Benson, explained that the proposed legislation seeks to amend the Power Sector Reform Act 2005.

Benson argued that provision of certain funds for the development of host communities was a global best practice, adding that such funds, often referred to as Trust Funds, exist in Canada, Namibia, United Kingdom, Kyrgyzstan and even Ghana.

While leading debate on the bill, he argued that there was the need to set aside the monies to address the adverse effects on the environment, human and aquatic lives on host communities of the power generating stations across the country, particularly thermal pollution from power generating stations.

The lawmaker remarked that monies accruing from the fund will be applied to sustainable infrastructural development projects, job creation, improvement of education, empowerment and skills acquisition for youths, women and other vulnerable groups, provision of medical facilities and personnel and any other developmental project agreed to, consequent upon needs assessment.

He further stated that the money be received, managed and administered by a trustee to be appointed by the generating companies (GENCOs) and representative of the host communities, upon agreement among the host communities, the GENCOs and trustee.

“Without prejudice to any existing rights that may be accruing to host communities under the Act or any other enactment, five per cent of the revenue accruing from power generated by the power generating companies in the country shall be set aside for development of the communities.

“The purpose of this amendment is to provide for the development of communities hosting power generating companies across the country. When passed, the bill will help to ameliorate the sufferings and infrastructure deficit often suffered by communities due to the adverse climatic, livelihood and public health effects of their activities,” he stated.

He further explained that the host communities of GENCOs shall be entitled to five per cent of the firms’ previous year’s actual operating expenditure, adding: “Power generation, transmission, distribution and usage is known to cause harmful environmental and health challenges for host communities.

“In fact, it is almost impossible to produce, transmit and consume power without significant environmental impact. The electricity sector is unique among industrial sectors.”



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