Posted by Writing by Clifford Ndujihe, Obas Esiedesa, and Olayinka Ajayi
Ibadan — Yesterday, the federal government acknowledged that the majority of Nigeria’s power distribution companies (DisCos) are technically bankrupt and unable to fund network expansion projects or pay the invoices handed to them by the electrical market.
Engr. Sanusi Garba, Chairman of the Nigerian Electricity Regulatory Commission (NERC), stated at the 8th Africa Energy Market Place 2024 in Abuja that the DisCos’ inability to raise the necessary investment capital is a result of their poor financial condition.
Garba made the astute observation that the problems now confronting the industry were the result of previous failures and mistakes by individuals responsible for its management on both the policy and operational levels.
His position is that distribution businesses are now openly and technically bankrupt, and that they should seek debt or equity financing. The challenge is enormous.
“It is important to note that making decisions that affect the general public necessitates strong political will in order to reform the power sector.”
Chief Adebayo Adelabu, minister of power, has stated that the government is attempting to unbundle the operations of distribution corporations along state boundaries in order to make them sustainable and functional.
The present DisCos, according to Adelabu, cover too wide an area to provide adequate service to their customers.
Ministers have revealed that a plan to discharge the N1.3 trillion and $1.3 billion debts to power production companies and gas companies, respectively, has been authorized by President Bola Tinubu.
The President has authorized the proposal put out by the Minister of State Petroleum (Gas) to settle the outstanding obligations that power production firms owe gas supply companies, he announced.
‘’There are two aspects to the payments: the present debts and the legacy debts. A sum of around N130 billion will be disbursed by the Federal Ministry of Finance from the gas stabilization fund to settle the existing debt.