The Nigerian government is strategizing to establish smaller electricity distribution companies (DisCos) as it perceives existing DisCos to be overstretched in effectively servicing their current franchise areas. This move aims to address operational inefficiencies and improve service delivery to consumers nationwide.
Additionally, the government has set an ambitious target to increase power generation to 6,500 megawatts (MW). This objective underscores the urgency to bolster Nigeria’s energy capacity to meet the growing demands of its populace and spur economic development.
In a recent interview with CNBC Africa, George Etomi, Chairman of West Power and Gas, provided insights into the Nigerian electricity sector’s challenges. Etomi cautioned against solely blaming DisCos for power shortages, emphasizing that their revenue generation depends on supplying electricity.
He attributed the persistent blackouts to electricity transmission bottlenecks and natural gas shortages, vital for power generation. Etomi highlighted significant market shortfalls within Nigeria’s electricity sector, underscoring the urgent need for increased investments.
He pointed out that prevalent issues, such as energy theft and the absence of cost-reflective tariffs, hamper the operational efficiency of DisCos. These challenges impede the sector’s ability to operate sustainably and deliver reliable electricity services to consumers.
Etomi stressed the importance of stakeholder collaboration and attracting investors to the electricity sector. By fostering dialogue and sharing experiences, stakeholders can collectively address challenges and devise solutions to enhance the sector’s commercial viability.
Last month, Abuja DisCo published the names of several ministries, departments and agencies (MDAs) that were owing electricity payments, contributing to the liquidity challenges in the electricity sector.
This collaborative approach is essential for driving sustainable growth and ensuring the provision of affordable and accessible electricity to all Nigerians. Earlier this month, Proton Energy CEO Oti Ikomi highlighted key challenges in Nigeria’s power sector, citing a 40% loss between energy generated and collected, with 20% attributed to unpaid consumer bills and emphasizing issues in coordination and execution within the value chain.