The Managing Director of Azura Power West Africa Limited, Edu Okeke, has called on the Federal Government to take bold steps to address the challenges in Nigeria’s power sector.
Okeke urged the government to remove legacy debts from the books of electricity distribution companies (DisCos) and mandate them to raise their capital to at least $500 million.
He made this appeal during the 2024 Power Correspondents Association of Nigeria (PCAN) annual workshop held in Abuja.
The workshop, themed Nigerian Power Sector: Ending the Talk, Moving to Action, brought stakeholders together to discuss the pressing issues in the electricity sector.
“DisCos Must Be Properly Capitalized”
Okeke described the current state of DisCos as financially dire, emphasizing that most of them operate with negative equity.
“To enable meaningful progress, DisCos must be adequately capitalized,” he stated.
He compared the situation to Nigeria’s banking reforms, where the Central Bank of Nigeria increased capital requirements to strengthen financial institutions.
“The Nigerian Electricity Regulatory Commission (NERC) should enforce similar capitalization standards for DisCos,” Okeke added.
He also highlighted the burden of debts on DisCos, which he said has hindered their ability to invest in infrastructure like transformers and cables.
“Shareholders need to dilute their holdings to attract investors who can inject real capital, not just paper assets,” he said.
Okeke argued that raising capital would ensure better services for customers and long-term stability for the power sector.
Government Reaffirms Commitment
The Minister of Power, Chief Adebayo Adelabu, reaffirmed the Federal Government’s determination to complete reforms in the power sector.
Adelabu, represented by the Director of Renewable and Rural Power Access, Dr. Sunday Owolabi, said Nigeria has reached a critical juncture in its electricity journey.
He pledged that the government is focused on delivering 24-hour electricity supply to Nigerians.
“Our policies are not only visionary but also practical and sustainable,” the minister stated.
Adelabu emphasized ongoing efforts to improve infrastructure, enhance power generation, and upgrade transmission and distribution networks.
“We are resolute in our mission to improve the power supply for every Nigerian,” he added.
Safety and Standards Take Center Stage
The Managing Director of the Nigerian Electricity Management Services Agency (NEMSA), Engr. Aliyu Tahir, highlighted the agency’s commitment to ensuring safe electricity supply.
Tahir noted significant progress in infrastructure expansion and operational modernization to enhance safety and efficiency.
“Our mandate is clear: to ensure that every Nigerian has access to safe electricity and to protect lives and property by upholding quality standards in the sector,” he stated.
Tahir pointed out that NEMSA has made strides in addressing electrical safety and quality management to support reliable power systems.
Challenges Persist
Despite some progress, stakeholders at the event raised concerns about persistent challenges in the sector.
PCAN Chairman, Mr. Obas Esiedesa, criticized the slow deployment of electricity meters and recent national grid collapses.
“Our concerns are heightened by the fact that these issues persist despite the Service-Based Tariff and increased tariffs for Band A customers,” Esiedesa said.
He noted that while the electricity meter market has been deregulated, progress in metering has remained limited.
Esiedesa called for urgent action to address these bottlenecks, which continue to frustrate Nigerians.
A Sector in Need of Overhaul
Nigeria’s power sector has struggled for decades, with inadequate infrastructure and financial constraints hampering reliable electricity supply.
DisCos, responsible for electricity distribution, have often been criticized for their inefficiency and inability to meet consumer demands.
Okeke’s call for mandatory capitalization reflects a growing consensus that the sector needs a significant overhaul.
His proposal to remove legacy debts would free DisCos from financial burdens that have limited their growth.
Tahir’s emphasis on safety and quality standards underscores the need to modernize operations and protect consumers from electrical hazards.
