The new Minister of Power, Housing and Works, Babatunde Raji Fashola (SAN) has a very important role to play in the country’s power sector.
Fashola, a former Governor of Lagos state, must brace up to crack some unimaginable and embarrassing nuts in his ministries, now that he has the entire country as his constituency.
Despite being substantially controlled by the private sector, the power sector in Nigeria remains problematic across the value chain of generation, transmission and distribution.
The distribution companies (DISCOs), which feed the entire value chain financially, are facing funding deficit, a challenge that has affected the generation and transmission segments. The two legs depend on revenues collected by the distribution companies.
According to operators in the power sector, the transmission network, is very weak, the weakest link in the chain. The transmission company (TCN) can at its peak, wheel 5,300 Megawatts (Mw). However, even if the generation companies can pool 10,000Mw, customers can only get 5100Mw because 200Mw may be kept as spinning reserve to balance emergencies.
The distribution companies take at best 60 per cent of what they are supposed to get. No thanks to technical and commercial challenges. Power is lost in transit due to poor equipment and facilities as well as the unwillingness of some customers to pay their electricity bills.
As at the last count, the DISCOs were being owed N32 billion, the bulk of which was, ironically, in the hands of Federal Government Ministries, Departments and Agencies (MDAs), and the Nigerian Military.
According to the Chairman, Egbin Power Generation Plc., Mr. Kola Adesina, the company is owed N39 billion by the Federal Government, which accumulated from when they took over the asset in November 1, 2013 to October this year.
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