THE Association of Nigerian Electricity Distributors (ANED), has said that Nigeria cannot have a stable power supply in the next five years except the challenges confronting the power sector are addressed.
Speaking during a press conference in Lagos on Tuesday, the Executive Director, Research and Advocacy, Barrister Sunday Oduntan, stated that “there are challenges inhibiting power sector efficiency and these include liquidity gap of N1.3trillion, lack of improved generation due to mismatched electricity pricing, lack of much-needed investment in transmission network, lack of much-needed investment in distribution network and rising energy theft among others. Except these challenges are addressed, we may not have a stable power supply in the next five years.”
He stressed that the illiquidity in the sector must be prioritised because the power sector cannot afford to collapse.
“If the power sector collapses, many banks will collapse because in 2013 during privatisation, only one distribution company obtained a 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 in India and it is working as we speak. If it is successful in India, why is it not working in Nigeria,” he said.
Furthermore, Oduntan decried prevalent non-reflective tariff and he called on the government to prevail on the military, ministries and government agencies (MDAs) to pay for energy consumed.
According to him, “MDAs are owing us about N72billion. The military has refused to pay since August last year when the Minister of Power, Works and Housing, Raji Fashola, said the federal government will settle all legacy debts by MDAs last year August. Afterwards, nothing has been paid for by the military.
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“It is important to also state that the mismatch in electricity pricing has resulted in the inability of the discos to settle their obligations to Nigerian Bulk Electricity Traders (NBET). What we get from NBET is usually higher than what the discos charge the consumers because we don’t have control over tariff. The 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.”
On the controversies surrounding eligible customers policy, he argued that tariffs for industrial consumers were structured to be subsidising the residential consumers.
“The eligible customer policy will take the industrial customers off the discos’ network and this will affect the revenue of the discos. If the policy will take away the industrial customers from the discos’ network, then, there must be a review of the tariff to guarantee liquidity in the sector,” he said.
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