Wrangling rocks Nigeria’s power sector, delays privatisation gains

Wrangling among major stakeholders in the power sector has foot-dragged expected gains six years after the privatisation of assets.

This, checks by New Telegraph showed, came as operators and industry watchers blamed the Nigerian Electricity Regulatory Commission (NERC) for its threat to revoke the licences of the eight distribution companies due to remittance.

The Federal Government under the former President Goodluck Jonathan, six years ago, formally handed over 18 power utility firms to investors in the private sector.

However, tell-tale signs of poor power supply, unstable operations have remained.

Since November 1, 2013, when Nigerians, including power investor, thought things would transform quickly, the power sector has yet to see some stability.

From July this year, the market operator rolled out sanctions that compelled the distribution companies to start paying 100 per cent for ancillary services.

NERC followed suit in October by giving eight DisCos 60 days to defend their default in the minimum payment required for energy traded.

However, operators and industry watchers have blamed NERC for such actions since it did not implement about six MYTO tariff review since June 2016.

The private firms at various occasions said their demand for cost reflective tariff had not been met and there is no practical terms to cushion the over N1.3 trillion shortfall in the electricity market.

Although government through the Central Bank of Nigeria (CBN) had injected about N1.7 trillion into the sector, operators insist that it was a loan, which is deducted at source monthly at 11 per cent interest rate despite the liquidity challenges.

Government handed over 60 per cent control of 10 distribution companies and concessioned six generation companies (GenCos) initially after receiving $3 billion from the private investors.

Transaction for Kaduna DisCo was completed in 2014.

It left the Transmission Company of Nigeria (TCN) under a four-year management contract by Manitoba Hydro International Nigeria Limited (MHINL).

However, it came under local administration since 2016.

The transaction supervised by the Bureau for Public Enterprises (BPE) designed Conditions Precedent (CP) especially on the need for DisCos to reduce the Aggregate Technical, Commercial and Collection (ATC&C) losses and for the GenCos to rehabilitate turbines and raise the actual generation capacity, which was around 4,500 megawatts (MW) then.

 

Source: New Telegraph

Share

SUBSCRIBE TO LATEST ENERGY NEWS

Read the latest energy industry news and researched articles
for oil and gas, power generation, renewable energy, events and more...