Nigeria Needs $100b Investment to Enjoy Stable Power – Discos

  • Nigeria Needs $100b Investment to Enjoy Stable Power – Discos

The Electricity distribution companies (Discos) in Nigeria have said for the nation to enjoy constant power supply, an investment of at least $100 billion (N36 trillion) is needed in the power sector over a period of 20 years.

In a statement released by the Association of Nigerian Electricity Distributors (ANED), Discos said about $10 billion (N3.6 trillion) of that amount would be required to strengthen the distribution networks.

This, the association said would raise the operational status of the power distributing system in the country and guarantee the quality of supply and service to consumers.

The Discos explained that another $40 billion (N14.4 trillion) investment would be needed for the entire value chain over the next 20 years.

The statement showed the distribution companies disclosed this at a seminar organised on their Performance Improvement Plans (PIPs) — which was requested by the Nigerian Electricity Regulatory Commission (NERC) to move the sector forward.

According to ANED, once the plans are approved by the NERC, each Discos’ PIP would be used to review its tariff in the sector and implemented in 2020.

The PIP process would allow proper review of the present Capital Expenditure (CAPEX) of the Discos; inflation rate; gas price; foreign exchange rate; and existing power generation capacity in the country to ensure cost reflective rate for them.

Nigeria, according to the Vice President, Yemi Osinbajo, is only able to supply an average of 3975 megawatts (MW) daily, while poor distribution networks and other factors constrained another 3153MW.

A study published by French Development Agency (AFD) and the European Union (EU) read: “Indeed, NESI (Nigeria Electricity Supply Industry) as a whole need to invest more than USD 100 billion in the next 20 years if Nigeria wants to cover 24/7 hours of power supply to its citizens.”

It also stated that the interface project between the Discos and Transmission Company of Nigeria (TCN) would at least require an investment of $4.2 billion to follow TCN expansion plan.

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]

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