The Executive Director of the Electricity Consumer Protection Advocacy Centre, Chief Princewill Okorie, has advised the current Minister of Power, Mr Joseph Tegbe, to focus on the review of investments so far made in the power sector, and not recapitalisation.
Chief Okorie, who spoke exclusively to TheFact Daily on Thursday, underscored the need for evaluation of investments across the electricity value chain to ascertain the level of growth.
He said the new Minister should jettison the idea of recapitalisation of the sector, which according to him, would only encourage embezzlement and focus on reviewing both the investments and governance structure of the sector.
“There should be nothing like recapitalisation for now, the new Minister should focus on first of all, reviewing the investments that have so far been made in the sector.
“If you recapitalise the sector, they will steal the money. The money that has been injected into the sector since privatization has not been accounted for. So, why do you want to push more money into the sector?” he asked.
Okorie said, since the commencement of privatization of the Power Sector in 2013, the Federal Government has intervened to support the DisCos in several ways, irrespective of the fact that they are private sector operators.
Among such interventions, according to him, was the National Mass Metering Programme introduced by NERC and CBN in 2020 for which N200 billion naira was ear-marked and N59 billion released to the eleven DisCos at the zero phase of implementation.
He said an evaluation of the implementation of that programme (NMMP) by the House of Representative, showed that the process has not been efficient and has been manipulated.
“In some cases, the meters which were said to be free were sold to consumers and the revenue the meters have generated from vending has been diverted. Yet DisCos are complaining of lack of liquidity.
“Worst is that different narratives come from NERC, CBN, Discos and the Fund managers on the project while consumers who are short changed are still made to pay for the meters without proper account on how it was managed.
“Similarly, World Bank, GIZ, European Union etc. have contributed substantial funds to support the DisCos. Can a transparent and accountable review of the funds be carried out to establish the claims and justification for cost reflective tariff?”, he asked.
The outgone Minister of Power, Chief Adebayo Adelabu, had proposed recapitalisation as a solution to the liquidity crisis in the sector, especially at the downstream sector.
He opined that as the tenure of the operational licenses of the DisCos approaches renewal, the Federal Government should introduce a minimum capital adequacy requirement as part of the license renewal process, to strengthen the financial health and liquidity position of the utilities.
According to him, the sector continues to face challenges of under-capitalization among several DisCos and a severe debt burden that has constrained their operational efficiency and service delivery over the years.
However, he assured that the Nigerian Electricity Regulatory Commission (NERC) and the State Regulatory Commissions are working in close synergy to drive performance improvement across the utilities.
This is just as the Managing Director of the Azura Power, Engr. Edu Okeke, advised the Federal Government to ensure that each DisCo have up to $500million capital base to operate efficiently in the distribution value chain of the sector.
Engr. Edu said: “You can’t operate any of the DisCos in Nigeria with less than $500 million shareholders, unfortunately all of them are basically negative. What the government should first of all do is to clean up the balance sheets of DisCos,” he added.
