- Nigeria’s Power Companies Are Weak, Bankrupt -TCN
Mr. Usman Mohammed, the Managing Director/Chief Executive Officer, Transmission Company of Nigeria (TCN), has pronounced Nigeria’s power companies weak and technically bankrupt.
Mohammed, who was speaking at the interactive forum on eligible customer regulations organised by the Manufacturers Association of Nigeria in Lagos on Thursday, said the Federal government continues to intervene in the power sector despite privatisation.
“We should be worried as Nigerians because we are creating another deep hole in the power sector. This is worrisome for an industry that is privatised; the government is putting this money in the sector because we have electricity companies that are weak,” Mohammed stated.
In 2014, the central bank launched a N213 billion intervention fund to assist the Gencos and Discos to execute agreed metering and maintenance programmes, settle legacy gas debts, and finance procurement of transformers and other equipment.
Three years later the government was forced to introduced another programme, the Power Sector Recovery Programme, after the failure of the first facility to provide a CBN-funded Payment Assurance Guarantee for two years to the tune of N701 billion.
The fund, which is expected to cover the shortfalls of the Nigeria Bulk Electricity Trading Plc, is targeted at Gencos and gas suppliers for power generated and future power generation, and in isolation, will cover N300 billion in existing liabilities.
According to the TCN boss, a company that is bankrupt should either be wound up or recapitalised.
“But what we have now is that we have technically bankrupt companies that cannot stand on their own and government is supporting them, which does not make sense,” he said.
Mohammed explained that the power sector needs collective efforts to work as it is key to national growth.
“If we don’t fix the power sector, Nigeria will continue to be in poverty; we will continue to have insecurity.”
He further stated that for government interventions to work, the Discos must be recapitalised.
“We should also come up with a tariff that will support the industry,” he said, adding that it was crucial to have an effective regulator.