Femi Badewole

Private investors won't invest to provide 247 electricity supply with our current problem. We still need govt to provide patient capital to put things to order for the private guys to deliver. TCN tariff component is around N15/kWh, inside that N15, the share of TSP is around N7 or N9/kWh. At this pricing, who can invest in your transmission if not the govt? You also cannot privatise the transmission for various reasons including security and pricing. On the Discos side, the owners didn't quite invest much on either metering or network. They are looped in the circle of fixing, rehabilitation and maintaining current network rather than expansion. Take for example, Enugu disco total customers is 1.6m, total metered are 800k, leaving 808k unmetered. If you want to meter those 800k customers at average price of N200k, Enugu disco need N160bn either in equity or debt or both. If I'm being conservative, it will take Enugu 2 to 3 years to fully meter those customers and based on the record as at august, Enugu disco is losing N11bn every month from both billing and collection losses. assuming 2 years to fully meter, N11b * 24 months = N264bn. but lets not use N264bn, lets use N150bn because as you meter customers and close some gap, your losses will be going down... N160bn to fully meter customers. N150bn estimated losses within the metering period. Total funding requirement = N310bn. I make a big assumptions here, which closing of metering can reduce your losses. Reality may differ. You think someone can put N310bn in Enugu disco at the current borrowing rate and then wait for long to recover his funds? Don't be deceive, no one will. Here is another catch, putting all this money wouldn't ensure stable supply to Enugu without having a reliable supply to the franchise. If investors put that money and transmission fail, then your capex recovery time just get elongated. You also cannot charge ridiculous tariff. But lets assume NERC/SERC allowed you to charge ridiculous tariff like N500 or N700/kWh to recover capex. What happen next is demand destruction. If people cannot afford the tariff and stop using the electricity because of your pricing, it means revenue will be plummeted, thereby incurring loss or destroy your cashflow, making capex recovery difficult if not impossible. However you look at it, govt need to take some things off the investor's table. Whatever they are doing, they need to do more. ...And pls, Nigeria is NOT Lagos, nobody is going to pay N500/KWh for electricity despite it being reliable.