The Federal Government has acknowledged the challenges facing electricity distribution in Nigeria, attributing the persistent issues to the technical insolvency of most Electricity Distribution Companies (DisCos) operating in the country.
The Chairman of the Nigerian Electricity Regulatory Commission (NERC), Engr. Sanusi Garba, made this assertion on Thursday during his address at the 8th Africa Energy Market Place 2024 held in Abuja.
Garba highlighted that the financial constraints faced by DisCos hinder their ability to settle invoices from the electricity market and undertake essential network expansion projects. He emphasized the dire financial state of these companies, which poses significant obstacles to raising the necessary capital for investment.
He stated, “Today when you look at distribution companies, they are clearly and technically insolvent, and you also want them to raise capital in terms of debt or equity. It’s a herculean task. I also want to mention that implementing the power sector reform requires powerful political will to implement decisions that impact the wider public.”
Echoing Garba’s sentiments, the Minister of Power, Adebayo Adelabu, affirmed the government’s commitment to addressing the financial challenges faced by DisCos. Adelabu outlined plans to enhance the financial viability and effectiveness of DisCos by restructuring their operations along state boundaries.
Adelabu underscored the necessity of unbundling DisCos’ operations to ensure that their service delivery areas are more manageable and conducive to providing effective services to consumers.
