The federal government said on Wednesday that it would not continue to subsidise the power sector.
It therefore called on Distribution Companies in the country to improve on their financial and technical capacity to deliver or the government would intervene more directly to find solutions to darkness.
The Minister of Power, Saleh Mamman, said after the Federal Executive Council meeting on Wednesday that a “plan” had been submitted to government, targeting at resolving the challenges faced by the sector.
He stated that government was also in talks with a German firm, Siemens, to be part of the solutions it was seeking to align generation, transmission and distribution.
Giving an insight into to some of the challenges, the minister said Nigeria had the capacity to generate over 13,000 megawatts and could transmit 7,000MW.
However, he stated that much of the problems lay with the distribution companies, as they could only take 3,000 to 4,000MW.
Mamman also said the DisCos would take the 3,000MW but pay for only 1,000MW, an indication of lack of financial capacity.
He said, “Nigeria can generate up to 13,000MW of electricity but we cannot transmit all. So, today we presented to the council the solution to the problem of our generation. It is mainly distribution.
“We can generate 13,000MW, transmit 7,000MW, but can only distribute 3,000MW. There is a lot of work to be done in distribution companies and the government is now willing to take up the matter immediately.”
Speaking specifically on the DisCos, the minister said, “They are the ones manning the distribution. That is why I have submitted my observations to the government.
“It is left for the government that will have to decide (on what to do about the DisCos). We just have to sit and see whether they are capable, have the technical know-how.
“Most of the problems we are having today are due to technical loss and commercial loss. They will give you light and may not collect your money or they will collect the money and pocket it. Or they may send light and you may not have good sub-stations that may collect this power and distribute to customers. This has been our major problem and it is the responsibility of the DisCos to take care of that end.”
The minister said government had realised that it would not continue to subsidise the losses.
He added, “That is what we are saying; government cannot continue to be subsiding because what they (DisCos) doing is that they collect 3,000MW and pay for only 1,000MW.
“That is 15 per cent of what they are collecting. So, government is the one completing the payment. So, we cannot continue like that.
In the last three years alone, the government said it had spent over N1.7trn on the sector.
Incidentally, the power sector is privatised, save for the 40 per cent equity held in trust for Nigerians by the government.
Meanwhile, the FEC meeting, which was presided over by President Muhammadu Buhari, approved additional N6.9bn for the completion of the Tada Shonga Irrigation Project.
It is located in Shonga, Kwara State.
The Minister of Water Resources, Mr. Suleiman Adamu, said the additional approval brought the total project cost to N10.18bn.
The minister explained that the project was first awarded in 2010 but was later abandoned due to lack of funding.
He said the decision to do augmentation/ variation on the project and complete it was in line with the Buhari administration’s stance to complete viable projects previously awarded.
