- Discos seek closure of N1.3tn funding gap
The federal government has appointed the Transmission Company of Nigeria (TCN) to manage the N72 billion investments it plans to sink into the 11 electricity distribution companies (Discos) to upgrade their distribution infrastructure and networks.
TCN has also berated the Discos for their failure to provide stable electricity services to the consumers, when the distribution networks of Togo and Republic of Benin provide stable power to their customers with about 80 per cent of electricity consumed in those countries coming from Nigeria.
But in an apparent response to the challenge by the Minister of Power, Works and Housing, Mr. Babatunde Fashola, that they should either upgrade their operations or quit the business of electricity distribution in Nigeria, the private investors who bought the Discos Tuesday offered to hand over their assets to the federal government within 24 hours once they are paid compensation.
The investors have, however, given fresh condition for them to meet the government’s expectations, saying the current N1.3 trillion financial gap created by the sector’s non-cost reflective tariff, must be addressed by the federal government.
Speaking Tuesday with journalists in Abuja, the Managing Director of TCN, Mr. Usman Mohammed, stated that Fashola had received an approval from the federal government for the TCN to manage the N72 billion planned investments in the Discos.
Mohammed said the TCN got the approval because it already had a comprehensive systems study and plan on Nigeria’s electricity network, adding that the investment would help stabilise the country’s electricity grid.
“Discos have low capacity; investments have not been done in the Discos, and you know it. We have commissioned so many substations; go and find out how many of these have been done by the Discos. That is why we are begging the government and anybody that is willing to listen to us that investments need to go to the Discos. We are actually working with the government to see that the last mile which is now the weakest link in the power value chain which is distribution, that investments are directed to that sector,” Mohammed said.
He further explained: “In the past the government had not shown interest in putting money in the distribution, but recently the minister of power has approached the government and got it to approve N72 billion which will be invested in the Discos.
“This is one milestone that will help us to also stabilise the grid. It is in our interest that distribution is rehabilitated and I can tell you we lost two transformers in Abuja because of poor distribution. If distribution is not fixed, it will affect us at the TCN. Government is investing in the Discos and it is TCN that is managing the investment. We are managing it on behalf of the minister of power,” Mohammed said.
