A Review of the Nigerian Energy Industry

Discos lament inability to meet payment obligations

Power distribution transformer.
Power distribution transformer.

*Say no new investments in power sector

Oscarline Onwuemenyi

16 July 2015, Sweetcrude, Abuja – Electricity Distribution Companies, Discos, operating in Nigeria have said it is becoming increasingly difficult for them to meet their operational payment obligations to the Federal government.

The Nigerian Electricity Regulatory Commission, NERC, had revealed that more than 70 per cent of Electricity Distribution Companies (Disco) in the country stand at below 45 per cent ability to meet financial obligations.

This was attributed to the standpoint that the steady progress for which DISCOs are required to meet their obligations is, however, not widespread, as there has been dismal performance recorded by a number of companies.

According to the power companies, the development has led to a halt in investments in electricity distribution assets.

Speaking on behalf of the firms during a meeting with the Federal Government in Abuja on Tuesday, a representative of Eko Electricity Distribution Company, Mr. Ernest Orji, urged the current administration to assist the firms in closing the gaps that were not envisaged when they were acquiring the power assets.

Orji, according to a statement issued by the Federal Ministry of Power, stated that “large

investment in distribution network was still a mirage as the goal post keeps moving. It is scary, as many of us cannot meet payment obligations to the market operator.”

It was reported last week that the Discos had failed to pay to the government the outstanding amounts for capacity and energy invoiced them since February this year.

Responding to the concerns of the Discos, the Permanent Secretary, Federal Ministry of Power,
Dr. Godknows Igali, stated that the new peak power generation was 4,545 megawatts, adding that the feat was made possible because security agencies were able to reduce the menace of vandalism of pipelines carrying gas to the various thermal plants.

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