DisCos appeal to FG to release N100bn electricity subsidy
The Association of Electricity Distribution Companies (ANED) has appealed to the Federal Government to provide the N100 billion subsidy it promised after private investors took over the power sector utilities on November 1, 2013.
ANED, in a statement by its Executive Director, Sunny Oduntan, also appealed to the government to inject funds into the transmission section of the sector.
It blamed the huge loss and rejection of electricity load on inadequate funding of the Transmission Company of Nigeria (TCN).
According to the statement, the government which holds 40 per cent equity in the utilities, pledged to provide many interventions in the Performance Agreement between DisCos and the Bureau of Public Enterprises (BPE).
It reads: “To date, the government has not met the privatisation transaction foundational requirements of providing N100 billion in subsidies, payment of MDA electricity obligations. It has not ensured that the DisCos have debt free financial books; and the implementation of a cost reflective tariff.”
It said that the funding level of TCN was inadequate, given TCN’s estimate of $ 7.5 billion for its five-year expansion plan designed to increase its capacity to wheel 10,000 megawatt (mw), from the current 4,500mw.
It said that the DisCos could only recoup their investments when they have more energy delivered by TCN in the area where they have customers.