We need N100bn from FG to improve power supply, say DisCos

The Association of Electricity Distribution Companies (ANED) has appealed to the federal government to provide the N100 billion subsidy it promised after private investors took over the power sector utilities on November 1, 2013.

In a statement by Sunny Oduntan, its executive director, ANED urged the government to inject funds into the transmission section of the sector.

He said that the inadequate funding of the Transmission Company of Nigeria (TCN) was responsible for the huge loss and rejection of electricity load.

He recalled that government, which holds 40 per cent equity in the utilities, had pledged to provide many interventions in the performance agreement between DisCos and the Bureau of Public Enterprises (BPE).

“To date, the government has not met the privatisation transaction foundational requirements of providing N100 billion in subsidies, payment of MDA electricity obligations,” Oduntan said.

“It has not ensured that the DisCos have debt free financial books; and the implementing of a cost reflective tariff.”

He noted that the funding level of TCN was inadequate, given its estimate of $7.5 billion for its five-year expansion plan.

“The plan was designed to increase its capacity to wheel 10,000 megawatt (mw), from the current 4,500mw.”

But DisCos, Oduntan said, could only recover their costs when they have more energy delivered by TCN in the area where they have customers.

“It is unfair for the DisCos to suffer financial losses due to the limitations associated with TCN’s wheeling of electricity,” he added.

He also said lamented TCN which is a public utility has remained underfunded for several decades.

According to him, “such underfunding has resulted in poor transmission infrastructure and planning, with the consequences of grid instability and limited wheeling capacity, adversely impacting the distribution and generation of electricity”.