$150m annual Capex investment limit killing power sector –DisCos


Adewale Sanyaolu

Nigerians’ dream of  uninterrupted and steady power supply may remain elusive in a regime of regulation that bars electricity Distribution Companies (Discos) from investing above $150 million yearly.

Executive Director of the Association of Nigerian Electricity Distributors (ANED), Mr. Sunday Oduntan, who voiced the investors concern recently, said Discos as regulated entities are not allowed to invest more than $13.6 million per Disco per year.

The ANED scribe said that the Transmission Company of Nigeria (TCN), has been advertising that Discos should massively invest in their distribution networks, particularly in the TCN-Disco interfaces.

Oduntan, said the call by TCN remained worrisome given TCN’s plan to invest about $4.2 billion, funded by multilateral institutions, which it described as cheap donor funding,  with FGN guarantees, the Discos cannot readily access for  infrastructure upgrade. ‘‘A recent study published by the AFD/EU indicated that Discos should be investing $10 billion in the next five years or almost $181 million per Disco per year. However, this cannot happen unless such related funding is allowed in the regulatory framework.’’

ANED noted that, following the Nigerian Electricity Regulatory Commission (NERC) guidelines released last month, the Discos are working on their Performance Improvement Plans (PIP) for 2020 to2024, as required by the Power Sector Recovery Plan (PSRP) approved by the Federal Government in 2017.

He stated that once the PIPs are approved by the Commission, it was the Discos expectation that the regulatory framework that will be established will determine a new CAPEX and OPEX allowances that are fundamentally necessary to allow the sector to improve.

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‘‘We believe that it is only when all Nigeria Electricity Supply Industry (NESI) stakeholders decide to work together that we will be able to anticipate and solve all these unfortunate events. Distrust among all NESI stakeholders and an avoidance of responsibility has also been part of the problem.

For us in ANED, our members are committed to working in partnership with all stakeholders along the value-chain, as necessary to ensure that we meet the Government’s privatization objectives of 24/7 power supply to our valued customers.’’



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