Residents of Festac Town, a Lagos surburb of about 1,000,000 people,
have been without electric power for two weeks as a result of some electrical
fault that the Eko Electricity Distribution Company (DISCO), which serves the
area, has apparently been unable to fix.
“We have been without light for more than two weeks, not even a blink,”
said Tosin Adebayo, a retired civil servant who currently augments his pension
by selling water to retail customers from tanks in his backyard.
“I don’t know what the problem is. We heard the government have given
these people money, so what are they doing with it?”
The Central Bank of Nigeria (CBN), recently, disbursed a total of
N57.72 billion to private power firms, including Eko Disco under the N213
billion Nigerian Electricity Market Stabilisation Facility (NEMSF).
A breakdown of some of the recipients shows that the Enugu, Kano and
Port Harcourt DISCOs received N10.25 billion, N7.63 billion and N6.58 billion,
respectively, as fresh funds, while the Eko DISCO, which got N5.164 billion
during the first phase of disbursement also got an additional N43.3 million.
In Nigeria, sporadic power cuts have hobbled Africa’s largest economy
for years as a lack of investment and inept management of the government-owned
power monopoly meant blackouts became the norm rather than an exception.
The government’s solution was to begin a privatisation process through
the sale of 18 companies unbundled from the former PHCN (or NEPA) comprising of
six generation companies (GENCOs), 11 distribution companies (DISCOs), and a
transmission company (TCN), which were expected to provide a steady flow of electricity
to homes and businesses.
While the first phase of the process was concluded in November 2013,
the upside from the privatisation have failed to materialise.
It is estimated that Nigeria needs an annual investment of $3.5 billion
to achieve its generation capacity target of 40,000 megawatts (MW) by 2020.
Nigeria’s current peak grid power generation stands at about 3,715.3MW
(Monday, February 16), with a per capita electricity usage of 136 kilowatt hour
(KWH).
This compares with an average per capita electricity usage of 4,803KWH
in South Africa, which generates about 41,000MW.
To work around the inadequate power supply, Nigerians have resorted to
generating electricity themselves using diesel and petrol‐powered generating sets.
Global Business Intelligence (GBI) – a research firm – estimates that
Nigerians spent about $455 million (N70.5bn) on generators in 2011.
The Discos – which are closest to consumers like Adebayo – are at the
end of a complex chain of players in the power sector that include the gas
suppliers, IPPs/Gencos, the bulk trader (NBET), and TCN.
The new private owners of power assets are struggling to meet capital
expenditure pledges made as issues ranging from gas unavailability for power
turbines, need for market reflective tariffs and power cheats from bypassed
meters and unpaid bills crimp revenues.
West Power and Gas Limited (WPG), which paid $135 million to acquire
the assets of Eko Disco, said last year that it had allocated $250 million for
the rehabilitation of the Disco.
However, ongoing blackouts in most parts of Lagos show that such capex
spend promises have yet to materialise.
PATRICK ATUANYA
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