Lack of investment by DISCOs, problem of power sector – TCN boss

The Managing Director and Chief Executive Officer (MD/CEO) of Transition Commission of Nigeria (TCN), Usman Gur Mohammed, has identified non investment by the Power Distribution Companies of Nigeria (DISCOs) as one of the major challenges faced by the power sector in country

He said lack of long term investment in the the sector has made power supply in the country a nightmare, saying the country has one of the worse distribution networks in Africa.

The MD, who spoke during the signing ceremony of the MoU between Power Analystics & Solutions, an indigenous investor, and CEC Africa Investment, a major investor in the Abuja Electricity Distribution Company (AEDC), Thursday, in Abuja, said until big companies take advantage of the privitazation window by the Federal Government and invest in the sector, power supply in the country will be far from being sustainable.

According to Mohammed: “The sector is about investment. The reason DISCOs and Power Generating Companies (GENCOs) were privatised is because government does not have the investment to sustain and expand the network. Therefore anything we are going to do to bring investment into the sector, we are happy to do it. And the kind of investment we are looking at is the kind of investment these people are bringing in, with this MoU..

“We must fix the power sector to realise the potentials of the country, if we are to fight poverty we must fix our power sector,” he said.
He stated further: “The MOU of today will add more megawatts to the grid. Currently with the addition of Azura, we have over 2000 megawatts stranded capacity we can’t feed to the grid. And this is because of lack of capacity by the DISCOs to pick the load. So, this can of arrangement will lead to the investment in DISCOs network in such a way that they will be able to take more power which is not even enough. If you look at the investment that TCN is doing it cannot be sustained by DISCOs. Currently about 40 percent interface between TCN and Disco are actually supplied directly from TCN network to the customers. That is, every fault from people’s houses like heater, iron hit our transformers directly. That means our transformers will continue to be damaged . DISCOs are supposed to build their own injection sub station and provide their own protection.but because there is no investment they are not doing that. DISCOs have not been able to bring investors into the sector.”

Mohammed disclosed that the TCN was expanding,. “Een the expansion we are doing is not going to be covered , you know we stimulated the grid IG 33 kV and we have come out with injection of N4.2bn, the DISCOs need to raise N2.2bn to be able to absorb the load we are bringing. But how will they be able to do that when there is no long term investment in DISCOs like this people are doing today?,” he queried.

The Director of Power Analystics & Solutions, Tony Ezeani said the company was bringing in over $2bn into the AEDC.

Accirding to him, the problem of light in Nigeria is the problem of DISCOs. “We need lots of investment in DISCOs. The reason we have been attracted to bring in funds to Abuja DISCO is because of what CEC Investment has been doing. This made AEDC looks attractive to us to expand, do metering so that Nigerians, especially those in Abuja, can have stable power. We are planning to expand to other DISCO , we want to use Abuja DISCO for a model for other DISCOs in Nigeria, to let Nigerians know that if there is investment in DISCOs there will be stable power supply.

“The MOU is both financial and technical support. What we want to do is to invest with CEC, take over and expand the distribution network”, he said.

Managing Director, CEC Africa, Emmanuel Katepa, said the sector needs a collaborative efforts to make the sector function optimally.
He said it therefore behoves on every Nigerian to find solutions to the challenges faced by the sector, adding the MoU was towards that end.

He said AEDC has of recent recorded lots of success stories despite the challenges. “It is one of the best DISCOs in the country,” he enthused.