*DisCos kick against FG’s reported repossession plan
Lagos — Executive Director, Research & Advocacy of the Association of Nigerian Electricity Distributors, ANED, Sunday Oduntan, has disclosed that the federal government is yet to pay off the debt owed to the Yola Disco investor after returning the firm to the government.
He made the disclosure while reacting to a recent publication which said government plans to repossess the non-performing electricity distribution companies after paying them off.
According to him, DisCos doubt the federal government will pay N736 billion to core investors to repossess the electricity companies, as it is yet to, for years, refund money to the Yola Disco investor.
The consortium of investors who bought YEDC in September of 2013, led by Integrated Energy and Distribution Management Services, declared a force majeure on the firm in 2015.
This was down to its inability to enumerate and collect revenue from its customers. The federal government is however yet to re-fund the investment pumped into the purchase of the company, thus creating debts for YEDC’s core investor who is also a chief financier of Ibadan Electricity Distribution Company.
As at July last year reports filtered in, that Bureau of Public Enterprises, BPE had received approval to resell YEDC.
Recent reports said the federal government was considering taking over some or all of the DISCOs it has described as “technically insolvent” or “failed investors” as a “solution” to the country’s power supply problems.
The Punch newspaper reported that 17 of the 27 power generating stations across Nigeria have been forced to shut down some of their operating units following low demand by DISCOs and worsening electricity supply across the country.
However, ANED its members are convinced that DisCos, as well as the government, are committed to resolving the challenges bedeviling the sector.
Oduntan dismissed the report the federal government would pay up N736 billion owed the investors before repossessing the DISCOs, describing it as sensational.
“The federal government and the electricity distribution company investors remain committed to working in partnership with government to address the current challenge of retail electricity distribution, as evidenced by the recent Siemens initiative and recent regulatory activities,” Oduntan said.
He listed other collaborative efforts by the DISCOs and the government to include the ongoing Meter Asset Providers MAP programme, the distribution franchise consultations, the present wrap-up of the minor electricity tariff reviews, among others to provide affordable and consistent power supply for electricity customers.
He urged the government to respect the sanctity of contract, as well as increased regulatory and policy certainty, to provide the enabling environment.
This, he said, will make the Nigerian Electricity Supply Industry, NESI commercially viable and sustainable, and attract the needed investments that continue to elude the sector.
“To do so within the provisions of the Share Sale Agreement signed by the DISCOs and government will require a sum in the region of $2.4bn (about N736bn), some of which will be paid as compensation to the failed investors.
“This is not a desirable outcome. It is noteworthy that the government is yet to pay the investor in Yola DISCO for its negotiated return to government,” he said.
“We are troubled that a sector that is already bedeviled with multiple challenges now has to deal with sensationalist and irresponsible journalism rather than an informed discussion of how we can move the sector forward,” he said.