- BPE and NERC had in July announced the restructuring of 5 distribution companies.
- ANED kicks against this move.
Electricity Distribution Companies (DisCos) under the aegis of the Association of Nigerian Electricity Distributors (ANED) have lamented the recent “restructuring” of the five DisCos despite the federal government’s failure to release the promised N100 billion subsidy.
The Executive Director of Research and Advocacy, ANED, Sunday Oduntan, noted that the association views the restructuring as inconsistent with all the guidelines and processes necessary to comply with the framework of privatization agreements and the rule of law.
“We believe that it is reasonable to conclude that the resultant outcome has been an appropriation or backdoor renationalization of the DisCos by the Federal Government of Nigeria, he said.”
He stated that the basis of privatization was fundamentally flawed from the beginning due to conditions not met by the federal government while expecting the DisCos to meet their performance obligations.
“Not only were the investors short-changed because of insufficient and unreliable data that BPE provided to them during the privatization process, but the government also committed to and failed to deliver on the following -DisCos’ debt-free financial books; payment of Ministries, Department and Agencies (MDA) electricity debts; N100 billion subsidy; implementation of a cost-reflective electricity tariff; and Private management of the Transmission Company of Nigeria (TCN), Oduntan added.”
The association maintained that the unfulfilled condition of implementing a cost-reflective electricity tariff led to accrued significant debt and liabilities on the DisCos’ financial books, as they continued to sell electricity below the cost price while TCN remaining a government-owned and operated entity is a significant challenge to attracting the private investment that is critical to addressing the transmission bottleneck that is currently belittling the Nigerian Electricity Supply Industry [NESI] value chain.