Discos: We Buy Electricity at N305 Per Dollar, Sell at N198.98
By Ejiofor Alike
The electricity distribution companies in the country have blamed the liquidity crisis in the power sector to the inadequate payment made by consumers for power distributed. They claimed they buy electricity from the generation companies based on the exchange rate of N305 per dollar and sell at the exchange rate of N198.98 per dollar.
In a lead presentation at a forum organised in Lagos by Siemens Nigeria on energy management system for transmission and distribution systems, the Managing Director and Chief Executive Officer of Eko Electricity Distribution Company (EKEDC), Mr. Oladele Amoda said this disparity was the root cause of the current liquidity gap in the power sector.
Amoda, whose presentation was on â€œNigerian Power Sector Distribution Landscape: Perspective of Discos,â€ noted that this disparity had impacted the capacity of the companies to replace dilapidated equipment.
â€œIn Eko Disco, for instance, some assets are 60 years old and need to be replaced but we have serious challenge of access to finance,â€ he added.
Amoda, who also noted that South Africa with a population of 40 million people generates 40 megawatts of electricity, argued that it would require special science to share only 4,000 megawatts of electricity to 170 million Nigerians.
The Eko Disco CEO, who was represented by the companyâ€™s head of procurement and regulatory unit, Mr. Nosa Igbinedon, said the countryâ€™s generation was inadequate and extremely difficult to distribute to the countryâ€™s population.
Also speaking, the Chief Executive Officer of Siemens Limited, Mrs. Onyeche Tifase acknowledged the liquidity crisis that hit the countryâ€™s power sector and pledged her companyâ€™s willingness to assist the investors to manage the crisis.
â€œWe can manage anything. We generate energy and we can also manage it to be cost-effective. We can also manage it so that you can control it. If the government is not doing well, the operators will not do well. If Siemens is not doing well, our clients and contractors will not do well and we take responsibility for that. In Nigeria, we are still talking about cashflow issues and obsolete equipment; in other countries, they are talking about intelligence, smart race, and diversity of energy mix,â€ she explained.
Citing the Indian experience, Tifase stated that Nigeriaâ€™s electricity distribution system and the countryâ€™s traffic situation resembled those of India but added that India is far ahead of Nigeria in power generation.
According to her, India has the assets and capacity to invest, adding that many Indian companies were involved in Nigeriaâ€™s power privatisation.
â€œWe believe that Siemens can get the roadmap on how things can be done in Nigeriaâ€™s power sector,â€ she added.
In his presentation, Siemens Indiaâ€™s Head of Export Unit, Mr. Rishi Maggon argued that the challenges are not peculiar to Nigeria but global.
According to him, in a world where data flows every second, there is now a challenge of digitalisation in the power business.
He also added that with the expected growth in world population from 7.3 billion to 9.6 billion by 2050, there will be pressure on power supply.
Maggon also identified the threat posed by urbanisation, saying that by 2050, 70 per cent of the world population will live in the cities, adding that this will boost demand for power supply.