DisCos warn: Nigeria may lack stable power supply in next five years

Sunday Oduntan, executive director, research and advocacy of Association of Nigerian Electricity Distributors (ANED), says the country may not achieve stable power supply in the next five years.

At a news conference in Lagos on Tuesday, Oduntan said if the challenges hindering power sector efficiency are not addressed, adequate electricity supply is uncertain.

According to him, some of the challenges include liquidity gap of N1.3 trillion, lack of improved generation due to mismatched electricity pricing, rising energy theft, lack of investment in transmission and distribution network, among others.

Oduntan added that the illiquidity in the power industry must also be addressed to avoid a collapse of the sector.

“Except these challenges are addressed, we may not have stable power supply in the next five years,” he said.

“If the power sector collapses, many banks will collapse because in 2013 during privatisation, only one Distribution Company obtained foreign loan, others took loans from local banks in dollars.

“Privatisation was based on 30 per cent equity and 70 percent loan. The model was borrowed from New Delhi, India and it is working as we speak. If it is successful in India, why is it not working in Nigeria?

“It is important to also state that the mismatch in electricity pricing has resulted into inability of the Discos to settle their obligations to the Nigerian Bulk Electricity Traders (NBET).

“What we get from NBET is usually higher than what the Discos charge to consumers because we don’t have control over tariff.

“Government determines what we charge power consumers. Until we have a review of electricity tariff which ought to have been taken place every six months, there can’t be cost-reflective tariff and without cost reflective tariff, Discos can’t settle their debts to NBET.’’