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Nigeria: gov urged to support Discos

In a statement issued on Monday by executive director of the association, Sunday Oduntan, he urged the government to inject funds into the transmission section of the sector, the Premium Times reported.

It is reported that in November 2013, the Nigerian government pledged to provide subsidies for electricity transmission, after private investors took over the power utilities. Read more…

“To date, the government has not met the privatisation transaction foundational requirements of providing N100 billion ($3 million) in subsidies, payment of MDA electricity obligations,” Oduntan said.

Inadequate funding

Oduntan said that the inadequate funding of the Transmission Company of Nigeria (TCN) is responsible for the huge loss and rejection of electricity load, media reported.

He maintained that government, which holds 40% equity in the utilities, had pledged to provide many interventions in the performance agreement between DisCos and the Bureau of Public Enterprises (BPE).

However, Oduntan said: “It has not ensured that the DisCos have debt free financial books; and the implementing of a cost reflective tariff.”

According to the statement, the ANED official noted that the funding level of TCN was inadequate, given its estimate of $7.5 billion for its five-year expansion plan.

“The plan was designed to increase its capacity to wheel 10,000MW from the current 4,500MW,” he noted.

According to the statement, Discos cover their costs when they have more energy delivered by TCN in the area where they have customers.

Discos suffering financial losses

Oduntan continued: “It is unfair for the Discos to suffer financial losses due to the limitations associated with TCN’s wheeling of electricity.”

He also lamented that TCN, which is a public utility has remained underfunded for several decades. Read more…

“Such underfunding has resulted in poor transmission infrastructure and planning, with the consequences of grid instability and limited wheeling capacity, adversely impacting the distribution and generation of electricity,” the statement said.

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Babalwa Bungane
Babalwa Bungane is the content producer for ESI Africa - Clarion Events Africa. Babalwa has been writing for the publication for over five years. She also contributes to sister publications; Smart Energy International and Power Engineering International. Babalwa is a social media enthusiast.