The Power Sector Recovery Programme (PSRP)
recently developed by the federal government and the World Bank to revive
Nigeria’s ailing power sector, has come up with an action plan for the sweeping
restructuring of the 11 electricity distribution companies (Discos) that would
enable government to take over any Disco found to be insolvent.
Details of the action plan, which THISDAY got
from a workshop organised by the Ministry of Power, Works and Housing to
educate the media on the expected workings of the PSRP, indicated that the
government is planning to restructure the Discos to meet their responsibilities
in the country’s privatised electricity market after a thorough forensic review
of their operations.
The workshop was held on Wednesday evening in
the ministry in Abuja. It had in attendance the Minister of Power, Works and
Housing, Mr. Babatunde Fashola, the two ministers of state – Mr. Mustapha
Shehuri and Mr. Suleiman Hassan – as well as heads of parastatals in the
ministry, all of whom took time to explain the government’s plan in the PSRP.
The report further made recommendations for
the Nigerian Electricity Regulatory Commission (NERC) to engage the Discos on
revised business plans, which will be negotiated, finalised and implemented.
It also requires the government to “start the process of restructuring Discos that are found to require new capital injections”.
It also requires the government to “start the process of restructuring Discos that are found to require new capital injections”.
“This would involve NERC, BPE (Bureau of
Public Enterprises), the Discos and other relevant parties. This may also
involve the takeover of Discos with degraded financial positions,” said the
PRSP report.
It however explained that before the takeover, technical competence reviews including forensic audits of all the Discos and the adequacy of their technical partners, should be undertaken to ensure that they had not failed in their initial agreements with the government after the privatisation exercise.
It however explained that before the takeover, technical competence reviews including forensic audits of all the Discos and the adequacy of their technical partners, should be undertaken to ensure that they had not failed in their initial agreements with the government after the privatisation exercise.
The document also revealed that there was an
ongoing audit of the performance agreements and all direct agreements the
government signed with operators in the sector to ensure that it was in
compliance with its obligations.
It explained that there should also be measures to address the operational challenges of the Discos, which should include: “Develop case studies to determine the level of load rejections in the network, develop investment plans with clear impact analyses for increase in load across the network and in metering, and ensure regulatory measures are enforced.”
It explained that there should also be measures to address the operational challenges of the Discos, which should include: “Develop case studies to determine the level of load rejections in the network, develop investment plans with clear impact analyses for increase in load across the network and in metering, and ensure regulatory measures are enforced.”
Also at the workshop, the Managing Director
of the Nigerian Bulk Electricity Trading Plc (NBET), Dr. Marilyn Amobi,
debunked claims by the Discos through their umbrella association, the
Association of Nigerian Electricity Distributors (ANED), that the electricity
they distribute to Nigerians at an average of N31 per kilowatts hour (kWh) is
retailed to them at N68/kWh.
Amobi, in her response to a question on how
much the NBET really sells the electricity it procures from the generation
companies (Gencos) to the Discos, stated that its retail price per kWh of
electricity to the Discos had not exceeded N18/kWh.
Source: This Day
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