Nigeria: Allow Other Investors If You Can't Deliver Electricity to Nigerians - Govt to Discos

19 February 2020

The Federal Government has advised electricity Distribution Companies (DisCos) to allow other investors if they cannot perform their responsibilities, saying the current subsidy regime is not sustainable.

The Minister of Power, Engr. Sale Mamman, gave the charge on Wednesday while fielding questions from journalists after the Federal Executive Council (FEC) meeting chaired by President Muhammadu Buhari at the State House, Abuja.

Engr. Mamman said the government was now willing to take up the matter in the power sector as the country could generate up to 13,000 megawatts of electricity, transmit 7,000 megawatts, but manage to distribute 3,000.

When asked to explain what would happen to the several financial interventions the government had made in the power sector, the minister said, "That is what we are saying that government cannot continue to subsidize because what they are doing is that they collect 3,000 megawatts and pay for only 1,000 megawatts; that is 15 percent of what they are collecting. So, government is the one completing the payment.

"So, we cannot continue like that. So, if they are ready to continue, fine, but if they are not ready to continue, maybe, they should give way to whoever that is ready to come and invest. So, we are asking government to review and see if they are capable, fine. But if they are not capable, they should give way."

The minister, who attributed most of the problem facing the country to inadequate and inefficient electricity supply due to power distribution challenge, underscored the need to tackle the losses suffered by DisCos due to technical and commercial reasons.

"So, we have to correct the infrastructure. That is why I said that today, I submitted my observation to the council and I believe the government is on it.

"One of the things I will tell you is that government has signed memorandum of understanding with the German government, Siemen.

"They are to align with distribution, transmission and generation companies so that at the end of the day, if we generate 13,000 megawatts, transmission will take the whole 13,000 and will distribute same; that way, Nigerians will be happy and everyone will have 24/7 electricity supply," he noted.

On what would happen to the DisCos, Engr, Mamman said, "the DisCos are the ones manning the distribution. That is why I have submitted my observations to the government. It is left for the government to decide. We just have to sit and see whether they are capable, have the technical know-how because most of the problems we are having today is the loss - technical loss and commercial loss.

"They will give you light and may not collect your money or they will collect the money and pocket, or they may send light and you may not have good sub-station that may collect this power and distribute to customers. This has been our major problem and it is the responsibility of the DisCos to take care of that end."

It would be recalled that last month, Governor Nasir El-Rufai of Kaduna state, who chaired an Ad-Hoc Committee on the Review of the Ownership Structure of the Electricity Power Distribution Companies constituted by National Economic Council (NEC), said Nigeria's power sector had gulped a sum of N1.7trillion in the last three years following its meeting chaired by Vice President Yemi Osinbajo.

El-Rufai said final decision on the power sector might be painful as spending on electricity without much progress was unsustainable.

The NEC at it last meeting co-opted Association of Electricity Distribution Companies in Nigeria and Association of Electricity Generation Companies of Nigeria as members of the committee.

The deadline for the submission of memoranda to the committee ended last Monday.

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