In two months, the power sector’s liquidity gap has risen from N1trillion to N1.1 trillion, the Association of Nigerian Electricity Distributors (ANED) has said.
Last November, Eko Electricity Distribution Company (EKEDC) Managing Director, Dr. Oladele Amoda put the liquidity gap at N1 trillion.
Aned spokesman Sunday Oduntan told The Nation that the liquidity gap went up by N100billion at the beginning of this year.
The development, he said, suggested a 10 per cent increase in the funding gap in the industry.
He said the increase followed the operators inability to fund their businesses. Oduntan said the power distribution companies (DisCos) were the “worse hit” because they contend with huge debts caused by non-payment of bills.
Oduntan said: ‘’The liquidity gap was around N900billion in the third quarter of 2016, but it is now over N1trillion. The gap occurs because the Ministries, Departments and Agencies (MDAs) owe the DisCos over N600billion. The failure of the MDAs to pay their debts has affected the capacity of the DisCos to create new investments.”
He said the power firms were not getting support from banks. “The sector is facing problems, such as liquidity squeeze, shortage of gas, poor generation and distribution, and weak metering system. The problems are financial and technical in nature,” he added.
According to Oduntan, other issues confronting the sector include meter bypassing, stealing and vandalism of cables and other power equipment.
Gas shortage, he said, is having a debilitating effect on the power sector, adding that there won’t be “appreciable growth” unless the issue is resolved.
Oduntan said the DisCos have adopted moral suasion in debt recovery. He said the firms could not use the Economic and Financial Crimes Commission (EFCC) to recover debts because such approach is not in the country’s best interests.
Amoda said the DisCos had made some progress despite their limited resources.
He said the DisCos were having problems meeting the customers need because of lack of funds.
The sector, he said, needed “proper funding” to achieve its goal of improving electricity supply.
For year after the sector privatisation, there has been no improvement in power supply.
Last week at the power sector stakeholders’meeting in Lagos, the Minister of Power, Works and Housing, Babatunde Fashola, said the government with some development agencies were working out how to make funds available for the sector.