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FG fails to release N100bn subsidy, say power firms



The 11 electricity distribution companies operating in the country on Monday said the Federal Government had failed to release the N100bn subsidy it promised operators in the sector after private investors took over about 18 successor companies of the defunct Power Holding Company of Nigeria on November 1, 2013.

Speaking under the aegis of the Association of Nigerian Electricity Distributors, the power firms also faulted the poor funding of the transmission unit of the power sector, saying this had resulted in the huge load rejection cases by them.



The Director, Advocacy and Research, ANED, Mr. Sunday Oduntan, explained in a statement issued in Abuja that the Federal Government held 40 per cent equity in the power distribution firms and noted that it committed to many interventions in the performance agreement between the Discos and the Bureau of Public Enterprises.

“To date, the government has not met the privatisation transaction foundational requirements of providing N100bn in subsidies, payment of the MDAs’ electricity obligations, ensuring that the Discos have debt free financial books and implementing a cost-reflective tariff,” Oduntan said.

On transmission constraints, ANED doubted if the N50bn appropriated for the Transmission Company of Nigeria in the 2016 budget had been released by half.

“This funding level is even more pitiful when, especially, measured against the TCN’s estimate of $7.5bn for its five-year expansion plan that is expected to take us to 10,000 megawatts from our current 4,500MW,” Oduntan added.

The Discos said they could only recover their costs when they had more energy delivered by the TCN in the areas where they had customers.

Oduntan stated, “Should the Discos suffer financial losses due to the limitations associated with the TCN’s wheeling constraints?


“The TCN has remained underfunded over several decades. Such limited or 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.”

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