- FG directs NERC to ensure Discos comply with NSE listing requirements
Chineme Okafor in Abuja
Plans by 11 electricity distribution companies in Nigeriaâ€™s power market to massively rollout consumer meters across their networks could be boosted by $100 million commitment by the Agence Francais de Developpement (AFD), THISDAY has learnt.
AFD is the financial agency, which is at the heart of Franceâ€™s respective aid schemes to developing countries and economies. It had from a recent government memo, which THISDAY obtained in Abuja, offered to lend up to $100 million to the Discos to actualise their metering plans.
The memo was on the governmentâ€™s Power Sector Recovery Plan, which was reportedly initiated in partnership with the World Bank. The memo, which contains various proposals and measures to revive Nigeriaâ€™s ailing power sector, was presented to the Federal Executive Council (FEC) for approval by the Minister of Power, Works, and Housing, Babatunde Fashola, in February. In it also, the government equally plans to get the Discos to list their shares on the Nigerian Stock Exchange (NSE), in addition to replacing its representatives on their boards with technically and commercially sound representatives against the potential practice of just anybody that may be politically favoured.
According to the memo, the policy drive included: â€œDirective to NERC, and Discos to accelerate rollout of meters across all customer classes of their franchises.
â€œPolicy interventions to facilitate financing for metering and network facilities that reduce losses and improve services and collections. This work is ongoing with a US$100 million funding commitments for lending to Discos by Agence Francais de Developpement (AFD),â€ it stated.
The Discos have reportedly been unable to comprehensively fund their respective metering plans, thus resulting in obvious revenue collection challenges, which affect the industryâ€™s finances.
But as part of the governmentâ€™s possible policy drive, the memo stated that it would, â€œstrengthen financial transparency and discipline to ensure that all industry revenues are fairly distributed to all market participants and their suppliers according to contractual commitments.â€
It explained that the policy interventions to be adopted were: â€œMinisterial policy directive to the commission (Nigerian Electricity Regulatory Commission) and to Central Bank of Nigeria (CBN) to establish a revenue management and collection distribution scheme based on the current NEMSF (Nigeria Electricity Market Stabilisation Fund) escrowed collection account for a transitional period to impose a fairer revenue distribution regime for the industry.â€ It added that the NERC had started consultations on this.
The memo further stated that interventions would include: â€œPresidential directive to BPE (Bureau of Public Enterprises) and MOFI (Ministry of Finance Incorporated) to replace FGNâ€™s two representatives on the boards of the Discos with one technical professional and one commercial/financial professional for stricter corporate governance and more vigorous defence of the public interest at board level.
â€œMinisterial policy directive to NERC and the boards of the Discos to immediately conduct a thorough forensic audit of their collection accounts, and submit to regular thorough financial audits, especially of all collection accounts.
â€œMinisterial policy directive to the commission to require Discos to comply with Nigerian Stock Exchange (NSE) listing requirements for public companies.
â€œDirective to Ministry of Power, Works and Housing, Ministry of Finance, CBN and Discos to establish a centralised payment scheme for FGN MDAs (Ministries, Departments, and Agencies) after a rigorous audit of their energy consumption, meters, billing processes and debts.â€
It also noted that the recent ministerial policy directive to NERC declaring criteria for qualification as an eligible customer in such a way as to empower willing maximum demand customers to contract power directly or through NBET with power generation companies (Gencos) was part of the intervention efforts.