Discos revenue shortfall hits N300bn * Seek access to forex

ELECTRICITY-06
Investors in power distribution companies in Nigeria last Tuesday, urged the federal government to provide them with easy access to foreign exchange, declaring that their revenue shortfalls had risen to N300 billion.
Managing Directors of all the 11 distribution companies in Nigeria (Discos), collectively revealed this at a World Press Conference in Lagos.
They unanimously declared that their cash liquidity crisis is threatening to completely undermine the country’s electricity value chain.
They insisted that the electricity debts plus interests that the Ministry Departments and Agencies (MDAs) of the government, including the ministry of power owe them had risen to N93 billion.
Executive Secretary of the Association of Nigeria Electricity Distributors (ANED), Mr. Sunday Oduntan, who spoke at the forum attended by Managing Directors of Ibadan Electricity Distribution Companies (IBEDC), Mr. John Donnachie, and his counterparts in Ikeja Electric and Abuja Electricity Distribution Company (ABEDC), Mr. Anthony Youdeowei and Neil Croucher, respectively, stressed that the power sector needs the intervention of the federal government to secure foreign exchange at official rate for purchase of equipment that are majorly bought abroad and imported into Nigeria.
Croucher added that the ministry of power is “inclusive” in the N93 billion debts.
“The ability of the power industry to meet its service delivery obligations is severely constrained by the lack of access to foreign exchange,” the ANED said.
The revenue shortfalls, the investors said, “Adversely impact the ability of Discos to make capital investments in metering, network expansion, equipment rehabilitation and replacement, that are critical for service delivery improvement.
The investors noted: “Industry shortfall is massive and growing, now about N300 billion. This is a cash liquidity crisis that threatens to completely undermine the electricity value chain and its ability to continue to serve its customers.”
“The Ministries, Departments and Agencies (MDAs) debts plus interests now stands at N93 billion and yet to be paid. The industry cannot survive with this high level of debt.
“The ability of the industry to meet its service delivery obligations is severely constrained by the lack of access to foreign exchange.”
Expressing disappointment at the high level of power theft, ANED declared that the industry “cannot survive with this level of theft,” which include “bypass of meters and self connection by customers.”
It noted: “Historically, tariffs did not cover full costs versus payment obligations, creating significant revenue shortfalls in the sector.”
On why there is no sufficient electricity, the DISCOs spokesperson said: “Gas pipeline vandalism leads to shortage of gas to power stations; shortage of gas leads to low generation; low generation and poor transmission facilities leads to low distribution, therefore, Discos are not to blame for poor power supply. We cannot give what we don’t have.”
The limited power generation, Oduntan said however, “robs customers of needed power supply and it prevents the Discos from collecting sufficient revenues to maintain and improve the network.”
Noting that 3, 283, 402 million customers have now been metered, Oduntan said that the metering gap is now down to 2.8 million customers.
In the generation, transmission and distribution chain, the power investors said, Discos collect for all stakeholders in the value chain as collection agent. They explained, “only 25 per cent of collection belongs to the Discos. When customers don’t pay, the whole sector is affected.”
For Nigeria’s electricity to move forward, the investors said that the government should honour terms of the privatisation and allow Discos easy access to foreign exchange.
MD of Ibadan DISCO, John Donnachie said that N55 billion forex is required by Discos annually.

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