DisCos reject proposed recapitalisation of assets

Fault non-release of N100 billion subsidy
The Association of Nigerian Electricity Distributors (ANED), an umbrella body of the 11 electricity distribution companies (DisCos), has kicked against the Federal Government’s proposed imposition of recapitalisation of the acquired assets.

The Nigerian Electricity Regulatory Commission (NERC) had accused the core investors of operating the acquired assets at colossal losses without rendering the expected efficient services to the consumers.

The NERC also said it would soon release mandatory recapitalisation guidelines for the investors to beef up the capital of the DisCos and generating companies (GenCos) to enable them have sufficient funds for investment and rendering efficient services.

The ANED Director of Research and Advocacy, Sunday Oduntan, who doubles as the spokesman, told The Guardian that the investors were against imposition of mandatory recapitalisation because the government had defaulted in fulfilling its part of the privatisation agreement.

He also accused the government of failure to implement the cost reflective tariff system, which would enable the DisCos to recover cost of operation.

Besides, ANED in a statement, decried the failure of Federal Government to provide a N100 billion subsidy allegedly promised after private investors took over about 18 power sector utilities on November 1, 2013.

“To date, the government has not met the privatisation transaction foundational requirements of providing N100 billion in subsidies; payment of MDA electricity obligations; ensuring that the DisCos have debt-free financial books and implementing a cost reflective tariff,” the statement said.

The ANED lamented that the dearth of TCN funding has impeded the DisCos’ ability to distribute power and has led to crashes in power turbines of GenCos due to TCN consistent requests for de-loading.