The Management of General Electric (GE) has set a fresh condition for it to invest in the Electricity Distribution Companies (DisCos).
The power giant is insisting on a sovereign guarantee from the Federal Governemnt.
The request came at the meeting the GE officials had with the DisCos in Abuja yesterday. GE was said to have been shocked by what it discovered in the books of the power sector.
The Executive Director, Association of Nigerian Electricity Distributors (ANED), Mr Sunday Oduntola, told reporters during the Electricity Policy Education in Abuja that operators needed funding for the sector to bridge the liquidity gap.
The theme of the workshop was: Challenges of the Nigerian Power Sector.
The only way the GE can stake its money in the sector, according to Oduntola, is for the Federal Government to give a sovereign guarantee in case of any infraction.
He said: “As at yesterday, we had a meeting with the team of people from the GE. The Head of GE had a meeting with ANED. He asked to see our balance sheets. As soon as he saw the balance sheets, he said No! No! He said if the government can provide what is called sovereign guarantee, yes!
“In the case of GE, it happened yesterday. They wanted to know how the sector is doing in terms of doing business. So they are trying to see how they can come in. They have a lot of money to invest. They wanted to know the challenges like the issue of metering, network and others.”
According to him, the meeting is an ongoing discussion because “they have the money and we need more foreign investors to come in.”
Oduntola also noted that Nigeria was not conducive for investment even when the power sector was privatised as security of investment always means the sanity of contract.
He said the business environment in the country is so difficult to the extent that only two out of the DisCos can conveniently pay their workers’ salaries as when due.
Arguing that the DisCos have injected funds into their business since 2013, he said they have installed a total of 612,552 meters.
He insisted that the major constraint to investment in the sector is lack of cost reflective tariff since there has been embargo on tariff increase since 2015.
Oduntola recalled that part of the $1.4billion paid for the Power Holding Company of Nigeria (PHCN) assets was used to pay off workers.
The ANED spokesman commended the administration of President Muhammadu Buhari, which he said has been more faithful to the development of the power sector than the previous ones.
He said the reason why some DisCos sometimes reject their load allocation, is when the Transmission Company of Nigeria (TCN) evacuates it where there are no equipment to cope with it.
He added that the DisCos also reject load allocation when it is wheeled to location that is permeated with electricity theft, yet does not pay for power.
“It is true that sometimes we reject load allocation. I have the right to tell you where I want my light,” he said.
He condemned corrupt practices in the electricity market which he said are the handiwork of both staff of the companies and their customers.
Confirming that the Federal Executive Council has approved the payment of N26billion as the verified Ministries, Departments and Agencies (MDAs) debt, he noted that the Minister of Power, Works and Housing, Babatunde Fashola directed that the money be paid as part of the debt that the DisCos are owing Nigeria Electricity Bulk Trading Company (NBET).
In other words, he said none of the DisCos received the cash from the federal government.