There has been several suggestions as to what is required for the power sector in Nigeria to reach its full potential, Helen Brume (Group Head, Energy (Deputy General Manager) Union Bank of Nigeria PLC), one of the speakers at the Future Energy Nigeria strategic Conference sessions when asked about the issues of financing, its corresponding obstacles, and steps in the right direction stated that “the power sector needs to be put on a long-term path towards sustainability and there are a lot of things that would go into that process”. Highlighting the factors necessary to enable the process, she noted that the “sector needs a cost-reflective tariff” which has been clamored for over the past five years and some steps have been taken in that direction evidenced in the minor tariff review that was done last year.
According to her there are certain basic conditions necessary to attract and retain investments and investors and without this requirement it is likely not to happen. She emphasized her point by stating that “investors need to be convinced that their investment is going to come back to them, that the cash-flow exists and are sustainable, and that the fundamentals supporting this cash-flows are actually in place”.
It is no hidden secret that data drives growth, fosters development, and encourages the continuous flow of funds, however it has been observed that there is a lack of adequate facts and figures as regards the end-users of energy generation in Nigeria. Speaking on the need for proper documentation in terms of customer enumeration to give context to how and where power is being consumed, a system that is clearly lacking in the sector, she stated that “when the power privatization process started six years ago, one of the first things that all the 11 distribution companies (DisCos) were tasked with was to conduct a customer enumeration exercise which would enable them know who their customers are, where they exist, knowing whether they are consuming the power legally or illegally, but it is sad that there are DisCos six years after that have not fully conducted this customer enumeration”.
In relation to the lack of compliance to the customer enumeration exercise directive, she implied that this is a fundamental flaw in the process of power distribution as it means that collection of tariffs and payment of GenCos, cannot be achieved efficiently when the process of doing so is not solid or in line with best practices. She reiterated further that the first step to receiving adequate investment for recapitalisation and having a working-system is by doing this customer enumeration as it would provide several vital information that can help to make the process of power distribution efficient, effective, and profitable.
In other words, more work needs to be done by the DisCos to ensure that there is an establishment of sustainability in both the system and process of power distribution as this is a prerequisite for a fresh batch of investment to be put into the sector.
In attendance at this just concluded energy-centred conference and Expo, were key-players, energy giants both locally and internationally, individuals interested in renewable energy, and pressmen. This event took place recently in Lagos from the 12th to 13th of November 2019.
