The Ibadan Electricity Distribution Company (IBEDC) has cried out over the huge debt profile of the Ministries, Departments and Agencies (MDAs) which it claimed, were posing threats to its N10 billion expansion projects.

The firm, which berated the poor attitude of government outfits to payment of bills, said the MDAs and military debts have accumulated to about N5.9 billion as at last year.

Going by the debt profile, implementation of its projects estimated at about N7.5billion yearly for metering and N3billion yearly for network expansion programme has become a herculean task.

The Managing Director, IBEDC, John Donnachie, who disclosed this at a press conference in Ibadan recently, said the outstanding balance on the debt payments have been posing major hindrance to its prepaid metering plan and other expansion projects earmarked for 2016.

According to him, “government agencies are owing us N5.9billion. Out of this debt, the military is owing us N4 billion as at July 31, 2015, and this is affecting our operations.”

He therefore appealed to government, military and domestic customers to comply with the new tariff structure and imbibe the culture of prompt electricity bill settlement.

On the new MYTO 2015, he said: “To avoid collapse of the power sector and ensure that customers get increase in power supply, there is a need to ensure that entire sector value chain is funded through an appropriate tariff structure.

“The capital expenditure allowed for IBEDC is not adequate for its operations, especially given the size of our metering and network improvements/upgrade requirements as well as our ATC$C loss reduction plan. We need to make almost double the investment done in the first five years in order to improve electricity supply to customers. This review will assist us to quickly address the problem of estimated billing (through metering) which today represents over 70 per cent of customers’ complaints,”

He explained that the Discos are like revenue collectors for other stakeholders in the electricity value chain. After collecting the revenue from customers, they retain 25 per cent and disburse 75 per cent to the generating companies (60 per cent), Transmission Company of Nigeria (11 per cent) and the regulators get 4 per cent accordingly.

“We need to invest fund in the sector to improve our distribution networks and provide for adequate metering system. The liquidity issues make it difficult to resolve the problems of inadequate generation and transmission constraints.

More importantly is the fact that distribution companies are unable to meet the operational costs of distributing power to their numerous customers, payment to generating and transmission companies, let alone their capital investments” he said.

Also speaking, the Deputy Managing Director, IBEDC, John Ayodele, said the capital expenditure allowed for IBEDC is inadequate for its operations, especially given the size of its metering and network improvements and upgrade requirement as well as reduction of Aggregate Technical, Commercial and Collection (ATC&C) losses.

To ensure effective metering of its numerous customers, Ayodele stated that IBEDC has placed order for about 100,000 units of prepaid meters that we intend to use for our customers in 2016 to resolve the problems of estimated billings.

“We require N7.5billion annually for metering and N3billion annually for network expansion, but we need fund to do that and we are pleading with the government ministries, departments and agencies including the military to help us settle their debt for us to serve them better,” he said.

Ahead of the implementation of the new electricity tariff in which the controversial fixed charges have been eliminated, the 11 Discos have been calling on their debtors, especially the government agencies and the military to pay up their debt.

This is because for decades, the power sector has been characterized by same set of challenges ranging from lack of funding, inadequate power supply, poor and neglected transmission and distribution networks, massive power theft and vandalism.

Besides the value chain inefficiencies, about 50 per cent of power bought is not paid for due to power theft, inadequate collection infrastructure, insufficient/non cost reflective tariff, exchange rate factor, and insufficient capital expenditure.