- Proton Energy CEO Oti Ikomi highlights 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.
- Ikomi addresses financing challenges, emphasizing the need for timely payment by government MDAs, points to ineffective electricity tariffs contributing to sector illiquidity, and suggests a comprehensive restructuring plan under the Presidential Power Initiative for effective resolution.
In a March 8 interview with CNBC Africa, the Chief Executive Officer of Proton Energy, Oti Ikomi, said that the reasons for the lingering challenges in Nigeria’s power sector are related mainly to the speed of coordination in the value chain as well as execution.
He said, “My basis is on the third quarter report from the Nigerian Electricity Regulatory Commission (NERC), which shows that, on average, we are losing about 40% on the amount of energy generated and the amount collected. So, for every N100, N40 is lost and not received by the DisCos. 20% of the losses are from the consumers’ unpaid bills.”
Ikomi cited the example of the Abuja Electricity Distribution Company (AEDC) putting out a notice to several government ministries, departments, and agencies (MDAs). He also highlighted a major problem in Nigeria’s transmission infrastructure.
Financing challenges
Ikomi said the MDAs must pay their bills. He also highlighted that, unfortunately, Nigeria’s electricity tariffs are still not reflective currently, contributing to the illiquidity along the power sector value chain. Note that the Nigerian government paid a $120 million debt to natural gas suppliers last month.
While speaking on current blackouts plaguing the country, Ikomi said there are technical challenges and issues with gas supply and vandalism, as well as load rejection by some DisCos because the economics are not working to their benefit.
When highlighting the need for gas infrastructure expansion in the country, Ikomi also said the challenges mentioned are symptoms of a larger problem, and that problem needs to be tackled effectively.
He recommended that the Presidential Power Initiative, in collaboration with Siemens Energy, should be a fully packaged restructuring plan as opposed to just a transmission plan, and the progress should be reported to the President and the ministers of power and gas every fortnight to facilitate effective tracking and implementation.