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Discos need N100 billion to improve electricity supply – Official

The Association of Electricity Distribution Companies, ANED, says it needs the N100 billion subsidy promised it by the Nigerian government to improve the nation’s power situation.

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

The Nigerian government had in November 2013 promised to provide subsidy for electricity transmission, after private investors took over the power sector utilities.

Mr. Oduntan 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,” Mr. Oduntan said.

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

According to the statement, the ANED official 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,” he noted.

But DisCos, the statement said, cover 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 lamented that TCN which is a public utility has remained underfunded for several decades.

“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,” the statement said.

Earlier, PREMIUM TIMES reports that the Association of Power Generation Companies, APGC, had on Thursday said it has the capacity to generate 12,000 MW to reduce the electricity needs of Nigerians.

Joy Ogaji, the Executive Secretary of the association said the generation companies have an installed capacity that could provide 12,500 MW of electricity to Nigerians.

She, however, added that the transmission company cannot take more than 4,500 MW.

“With the available capacity, I have 8,000 MW if I say okay, come and take, no one can take,” she had said.

Similarly, Ms. Ogaji had attributed the current reduction in power generation despite its capacity to produce more to paucity of funds, which, she said, hindered GENCOs from procuring gas to fire their power plants.

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