FG Woos Investors With 40% Stake in Discos
The federal government will use portions of its 40 per cent shares in the 11 electricity distribution companies (Discos) to raise funds for the expansion of the distribution networks, the Minister of Power, Works and Housing, Mr. Babatunde Fashola has disclosed.
Fashola stated recently in Abuja while briefing State House correspondents on the outcome of the last Federal Executive Council (FEC) meeting, that the FEC approved the ministry’s memo targeted at providing a framework of investment in expanding the distribution network so they can deliver an extra 2000 megawatts (MW) of electricity.
According to him, this electricity can be generated but cannot be distributed to Nigerians due to limitations in the distribution network.
“Nigeria today has 2000MW of electricity that cannot reach consumers because of lack of distribution capacity,” said Fashola.
He further explained: “Also presently, Nigeria can generate 7,000MW of electricity. The Transmission Company of Nigeria (TCN), following extensive grid expansion in the last two years, also now has the capacity to wheel the 7,000MW. But bottlenecks exist at the distribution level, with only 5,000MW of distribution capacity; hence the need for expansion.”
“The framework for investment to improve distribution capacity will involve competitive international tendering and procurement. The federal government will contribute 40 per cent of the needed investment based on its 40 per cent Disco ownership, while the Discos will contribute 60 per cent,” he added.
“Meanwhile, expansion in generation and transmission capacity are continuing,” as he noted that about 1,600 MW of new electricity generation capacity would be added to the power market in 2018,” Fashola said.
At the last power sector operators’ meeting in Lafia, Nasarawa State, Fashola said the government would present to the Discos, investments work plan to build 33/11/0.415kV lines and distribution substations.
According to him, the investment can make them to utilise the 2,000MW excess power generated by the power generation companies (Gencos) but not taken by the Discos.
The minister who had frequently complained about Discos’ network limitations, stated there was need for the Discos to resolve the network related issues in their franchise areas to ensure that the unutilised 2,000MW was evacuated to users, especially as he claimed that more power would be generated into the grid from upcoming generation stations in 2018.
Similarly, a report on areas that require investments at the 33/11kV voltage levels to unlock 2,000MW which was reportedly done by the government was forwarded to Fashola, for consideration in a bid to resolve the unutilised generation capacity challenges.