A Review of the Nigerian Energy Industry

Power sector records N7.2bn losses in six months

05 January 2015, Lagos – Nigeria’s power sector with an Aggregate Technical, Commercial and Collection losses put at over eight per cent, could have lost over N7.2bn from August 2014 to January this year, given a monthly ATC and C loss of N1.2bn.

Power.electricityOur correspondent gathered from power sector stakeholders at the ongoing Regional Workshop on Metering, Billing and Loss Reduction for Distribution Utilities organised by the National Power Training Institute of Nigeria that current ATC and C losses stood at over eight per cent.

It was also learnt that between August and September 2014, the country recorded over N1.2bn losses.

According to the stakeholders, the greatest challenges the present power utilities face are huge ATC and C losses.

It will be recalled that in 2012 when the United States Trade and Development Agency in collaboration with NAPTIN carried out studies on technical and commercial losses in the three most viable electricity distribution companies in Nigeria – Eko Electricity Distribution Company , Ikeja Electricity Distribution Company and Abuja Electricity Distribution Company, an average figure of 45 per cent was arrived at for the losses.

A majority of the losses, it was recorded then, were under commercial losses, put at 28 per cent.

According to NAPTN, it was because of the importance of this figure that the Bureau of Public Enterprises decided on who wins the bidding process for the generation and distribution companies based on the ability of the successful bidder to reduce the losses to the barest minimum.

The Federal Government also said it was moving to revalidate over 750,000 contracts entered into by the defunct Power Holding Company of Nigeria for the supply of electricity meters to Nigerians before the privatisation of the generation and distribution segments of the power sector.

This move became necessary following many litigation cases between the Federal Government and meter dealers that have trailed the country’s electricity metering programme and scheme over a year after the power distribution companies were bought over by private players.

The Permanent Secretary, Ministry of Power, Dr. Godknows Igali, who represented the Minister of Power at the NAPTIN workshop, said aside the 750,000 meter supply contracts, which had been looked into by government already, there were other contracts that were being reassessed to ascertain their validity.

Before the privatisation of the power distribution arm, he confirmed that over three million meters were tied to existing meter supply contracts, a good number of which had been stocked within the country in anticipation of a favourable market condition that would warrant their release.

He said, “Before privatisation, we have over 750,000 contracts for meter supply. These are the contracts we have looked into.

“Since privatisation, there have been many cases of litigation between government and dealers. The President had to come in, saying the cases should be taken out of court.

On the value of the contracts, the power sector permanent secretary said, “We are still working with the ministry and the regulator on the details.”


– The Punch

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