- … Earmarks N72bn to procure equipment
The Federal Government has pledged to invest about N72 billion for the procurement and installation of equipment to assist in the distribution of unused 2,000 Megawatts (MW) of stranded electricity to consumers across the country.
This was even as it ordered the power companies to provide electricity to Nigerians or leave the stage for more serious players.
Minister of Power, Works and Housing, Mr. Babatunde Fashola, made the commitment at a news conference in Abuja on Monday.
He explained that the 2,000MW was from the 7,000MW that Gencos could generate and the 5,000MW that Discos could distribute.
Fashola, had in February this year met with electricity customers and the Manufacturers Association of Nigeria (MAN) on how the 2,000 stranded megawatts (MW) of electricity could be delivered to industries and households.
The minister had said that Generation companies now produce 7,000MW and the Transmission Company of Nigeria (TCN) was able to transport all of it while working on expanding its capacity. He also revealed that the Distribution Companies (Discos) have also increased their load-taking capacity to 5,000MW. “However, this leaves a gap of 2,000MW of what you manufacturers will call unsold inventory. What we seek to do is just increase the possibility of access to power and the quality of power supply,” Fashola said, urging participants to work out solutions for distributing the stranded power.
He said government had advertised the process of procuring the equipment and was encouraging responses from original equipment manufacturers, which were being evaluated.
Fashola said government in a bid to help mitigate the challenges of funding in the sector had provided some intervention funds since the privatisation of the sector to the Discos and Gencos.
The minister noted that government had responded to claims of debts owed by MDAs to DisCos before the coming of the present administration alleged to be in the region of upwards of more than N70 Billion.
“At the cost of government, several hundreds of thousands of bills were painstakingly verified and government ascertained that N27 billion was owed by federal MDAs to Discos.
“The payment was by a set-off of this amount against the sum of N859 billion owed by Discos to Nigeria Bulk Electricity Trading (NBET) to reduce that debt.
“Prior to the tenure of this administration and during it, GENCOS and gas suppliers who produce the power were being underpaid by NBET.
“Because DisCos were under collecting or under remitting such that GenCos were getting only about 20 per cent of their invoices for power they generated.’’
The minister, who expressed worry over the activities of some operators, said government was acting and would not relent in salvaging the challenges in the sector.
“The number of complaints coming to government for meters, which the Discos should supply, and for estimated billings, and mass disconnections when no everybody is owing cannot continue.
Government must act, and will do so, the Discos bought these assets with their eyes open, and they must compete to deliver or exit.”