The Federal Government says that most of the electricity Distribution Companies (DisCos) in Nigeria are technically insolvent, as they are unable to meet their financial and operational obligations.
Chairman of the Nigerian Electricity Regulatory Commission, (NERC), Engr. Sanusi Garba, made this known yesterday, while speaking at the 8th Africa Energy Market Place 2024, which was held in Abuja.
According to Garba, the DisCos cant pay for invoices sent to them from the electricity market and invest in network expansion projects. He stated that the appalling financial state of the DisCos is an impediment to their ability to raise the needed capital to invest.
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Garba disclosed that the challenges facing the sector were a culmination of past mistakes by those charged with managing the sector, both at policy and operational levels.
According to him, Today when you look at distribution companies, they are clearly and technically insolvent, and you also want them to raise capital in terms of debt or equity. Its a Herculean task.
I also want to mention that implementing the power sector reform requires powerful political will to implement decisions that impact the wider public.
Speaking at the event, the Minister of Power, Chief Adebayo Adelabu, said the government is working to get the distribution companies solvent and effective by unbundling their operations along state boundaries.
Adelabu insisted that the areas covered by the current DisCos are too large for them to deliver effective services to consumers.
Speaking on how the government will tackle the N1.3 trillion owed to power generation companies and the $1.3 billion debt to gas companies, the minister disclosed that President Bola Tinubu has approved a plan to liquidate the debts.
