Minister probes renewal of DisCos license, recommends streamlining of coverage
Minister of Power, Chief Adebayo Adelabu has probed the renewal of the licenses of Electricity Distribution companies (DisCos) in the country.
Speaking during a one-day interaction session with journalists in Abuja, the Minister disclosed that he has ordered an investigation into the reason for the renewal of the licenses by five years.
“When I came in, the licenses that I saw were for 10 years, 2013 to 2023. But along the line I spoke to the Nigerian Electricity Regulatory Commission, NERC Chairman, and he said, the licenses have been extended for another five years.
“We are trying to review this action and understand the rationale for the extension, to see if it is justifiable,” he said.
Adelabu further called for the review of the structures of the electricity distribution companies (DisCos).
He recommended streamlining of the DisCos’ areas of coverage, which according to him, may be too large for each of the DisCos to manage effectively.
He also expressed skepticism towards the privatisation of power sector assets and infrastructure suggesting that commercialisation might be a more suitable approach based on the massive financial investment required, which he believes could be too expensive for the private sector to handle.
According to him, commercialisation may be a better alternative to privatisation, given the significant financial investment needed by operators under privatisation arrangements for the power sector assets and infrastructures.
He explained that the private sector may or may not be able to handle the huge financial investment outlay because of the long-term returns on investment.
Responding to a question on the operations of the DisCos, the Minister also revealed that the Nigeria government may not be able to revisit the contract at the moment, but, noted that President Tinubu’s administration is working on territorial coverage by creating mini-DisCos in some States to enable efficient coverage.
Adelabu further encouraged the State governments to work and collaborate with the DisCos in their various States by playing more roles and investing in the power sector, taking advantage of the opportunities presented by the Nigerian Electricity Act, of 2023.
The Minister therefore emphasised that the Power Ministry would continue to dialogue with DisCos to deliberate on the best way to move the sector forward.
According to him, the power sector is critical to the development of Nigeria, adding that the rural economy depends on the power to grow their businesses.
“Small businesses, rural irrigation, cocktail businesses, and industries need power to operate. We need to produce a significant portion of what we consume otherwise the currency of another country we use for international trade will be so important to you, so we need to move to local sufficiency and increase our local dependency to increase our incremental progress on a yearly basis till we get to our desired destination,” he said.
