Joseph Bakare
The Federal Government is very much concerned about the penurious state of Electricity Distribution Companies, DisCos, saying their insolvency is dragging growth of the sector.
Chairman of the Nigerian Electricity Regulatory Commission, NERC, Engr. Sanusi Garba, said the poor financial state of the DisCos is making it difficult for them to raise the needed capital to invest.
Garba, while speaking at the 8th Africa Energy Market Place 2024 in Abuja,
pointed out that the challenges facing the sector were a culmination of past inactions and missteps by those saddled with the responsibilities of managing the sector, both at policy and operational levels.
He said, “Today when you look at distribution companies, they are clearly and technically insolvent, and you also want them to raise capital in terms of debt or equity. It’s a herculean task.
“I also want to mention that implementing the power sector reform requires powerful political will to implement decisions that impact the wider public.”
Also speaking at the forum, Minister of Power, Chief Adebayo Adelabu, said the government is working to get the DisCos solvent and effective by unbundling their operations along state boundaries.
The Minister stated that the areas covered by the current DisCos are too large for them to deliver effective services to consumers.
Meanwhile, the African Development Bank, AfDB, said it had so far spent over $450 million to support various power sector projects and programmes with another $1 billion planned to support the power sector reform effort by the government.
Vice President, of Power, Energy, Climate and Green Growth Complex, AfDB, Dr. Kevin K. Kariuki, pointed out that with 90 million out of 600 million people in Africa without access to electricity living in Nigeria, the effectiveness of the reforms will be measured based how much of the over 13GigaWatts of installed capacity Nigeria utilizes for its development.
“The African Development Bank is acutely aware of the extent of the challenge, ranging from addressing the electricity access deficit to rehabilitating and upgrading the power system to meet a load of 20GW which is believed to be the true demand, for Nigeria’s 200 million people, hence, we must have all our hands (i.e. all stakeholders) on the deck empowered by the new Electricity Act, 2023!
“At AfDB, we put our money where our mouth is! As is manifested by the fact, we will be shortly seeking board approval for a one billion US dollars policy-based operation (PBO) with a significant energy component aimed at supporting the ongoing power sector reforms triggered by the new Electricity Act,” he stated