Tunde Bakare
Key power industry experts are unearthing some of the uncoordinated policies that have continued backpedal growth in the power sector.
It is believed that Nigeria’s staggering N4tn power sector debt is largely rooted in the deeply flawed privatisation process of 2013, particularly the inadequate licensing of distribution companies.
An energy expert Nick Agu, who, spoke on Arise TV on Tuesday, provided a scathing critique of the sector’s foundational issues.
According to Agu, the Goodluck Jonathan administration’s privatisation strategy was “far below expectations” because it failed to bring in genuine private sector participation in the crucial transmission segment.
“They privatised the generation and they privatised the distribution, but they left the transmission unprivatised,” Agu explained, adding that this oversight “made that privatisation to be dead on arrival.”
He further revealed concerning details about the power distributors, otherwise known as DisCos, whose share capital, in many cases, is shockingly low.
“I have five distribution companies, their share capital is 5 million naira, I mean 10 million naira. 10 million naira is just about five to six thousand dollars,” Agu stated, questioning how such under-capitalised entities could be entrusted with distributing electricity to multiple states.
Agu emphasised that these power distributors, lacking the “capital, the expertise, or the technology” to modernise infrastructure, have been unable to effectively collect revenue from consumers.
“The distribution companies (DisCos) are the biggest culprits because they are the ones who are expected to take money from consumers. And because they are not taking money from the consumers, that is why the government is now subsidising electricity, and that is what has caused this debt,” he elaborated.
The expert urged the current administration to tackle the transmission challenges immediately and compel the DisCos to invest in necessary infrastructure, rather than allowing them to continue operating on licenses they have effectively “broken their promises”