POWER Distribution Companies (DisCos) lack the capacity to meet the nation’s electricity needs, Transmission Company of Nigeria (TCN) Managing Director Usman Mohammed has said.
Mohammed, who spoke with The Nation in Lagos on Monday, said the privatisation process produced weak Discos.
“Some mistakes were made in the privatisation of the power sector and the mistakes led to very weak companies that succeeded in taking over the DisCos. The law was adjusted to allow bidding companies use technical partners and the partners were not to produce the Managing Directors. This made it easy for companies without capacity to buy the DiScos. The weakness must be corrected by recapitalising the DisCos because when we did the privatisation, we didn’t have the investments commensurate with the distribution network,” he said.
The TCN boss, however, cautioned against re-purchase of the privatised companies by the government because it would send a wrong signal to foreign investors. Instead, he said, the DisCos must be recapitalised to enhance their capacity. Mohammed expressed regret that the Federal Government has spent N1.5 trillion on the DisCos with little or nothing to show for it.
The TCN has estimated a DisCo capital requirement of $4.3billion to address capacity shortfalls and enable load growth to keep pace with capacity growth, he explained.
Mohammed listed other conditions for the DisCos to be able to live up to their responsibilities to include the commencement of bilateral trade, competitive procurement as required by National Electricity Regulatory Commission (NERC) Investment Regulation 2015, competitive procurement of generation companies, resetting the books of the Discos, proportionate representation on Board of DisCos by the Ministry of Finance and sustenance of Transmission Rehabilitation and Expansion Programme (TREP).