General
ATC&C Losses of 11 DisCos Leap to 51%—Agusto
By Modupe Gbadeyanka
In 2020, the 11 electricity distribution (DisCos) operating in Nigeria recorded aggregate technical, commercial and collection (ATC&C) losses of 51 per cent, higher than 45 per cent in 2019.
The rise in ATC&C losses was largely due to the impact of the COVID-19 pandemic, a report by a local rating agency, Agusto & Co, stated, adding that this high loss level remains one of the many reasons for the kickback from electricity consumers on tariff increases, especially in the absence of a significant and immediate improvement in power supply.
The firm said last year, the energy companies only billed for 74 per cent of the energy received from the transmission company, lower than the 81 per cent reported in the prior year.
Billing efficiency, which has historically been impaired by a low metering rate and energy theft, with only 37 per cent of registered electricity customers metered in 2020, was severely impacted by the global health crisis, it added.
Agusto said it believes the impact of the pandemic was more visible amongst consumer groups with post-paid meters and estimated bills given that the social distancing rules and movement restrictions established to curb the spread of the virus impaired the physical billing process. Collection efficiency also fell marginally to 66 per cent from 68 per cent one year prior.
Since the privatisation exercise that commenced in 2013, the electric power industry in Nigeria has remained fraught with many of the same challenges ranging from unreflective tariffs to high loss levels, obsolete infrastructure, weak policy implementation and gas shortages. All of these have culminated in a weak and erratic power supply and dependence on self-generation by many businesses and households.
“These challenges have not only weakened the ability of operators to meet electricity demand but also threaten their financial viability, with significant implications for the fiscal health of the country.
“Despite the series of amendments to the tariff structure, cash flows from MYTO (the Multi-Year Tariff Order) have remained insufficient to fully cover the costs of electricity supplied.
“The fear of the impact of a ‘rate shock’ on consumers and the accompanying loss of political capital has prevented the effective implementation of necessary amendments that will align the MYTO’s assumptions with economic realities. Electricity has thus consistently been sold at a discount, with end-user electricity tariffs much lower than the cost of electricity supplied,” a part of the report said.
“The shortfall from unreflective tariffs has been borne in large parts by the Federal Government of Nigeria (FGN) through multiple intervention funds and payment assurance facilities from the Central Bank of Nigeria (CBN) totalling close to N2 trillion ($4.9 billion) as at the end of 2020, equivalent to c.6 per cent of CBN’s balance sheet.
“Despite this level of intervention, the generating companies had estimated receivables of over N400 billion in 2020 alone. Whilst the interventions have been central in ensuring the profitability of operators along the industry’s value chain, they remain insufficient and unsustainable,” it added.
More recently, there have been notable efforts by the primary regulator – NERC – to minimise the challenges faced by operators in the Industry.
In particular, tariffs have been raised to near cost-reflective levels and adjusted to match consumption via an initiative dubbed Service Reflective Tariffs (SRT). The new tariff model as the name indicates is expected to reflect and match the quality of service received by the ultimate consumers of electricity.
Distribution companies will therefore discriminate in the application of tariffs; consumers who enjoy longer daily supply will be expected to pay higher rates and vice versa.
The SRT like other MYTO models has key estimates (and projections) for macroeconomic and industry-specific indicators including inflation, exchange rates and electricity generation.
Other company-dependent factors considered in the determination of tariffs include the amount of electricity received and the aggregate technical, commercial and collection (ATC&C) losses. Ultimately, tariff shortfalls (the difference between end-user tariffs and cost-reflective tariffs) are expected to taper off by the end of 2022, with tariffs fully reflective and sufficient to cover the cost of production, the report further said.
“Whilst a number of the assumptions align with market realities, we note that the inflation and electricity generation estimates in the SRT model are much higher than the actual entries reported for the corresponding periods.
“In our view, these disparities have the potential to impair the attainment of cost reflectiveness. Agusto believes adopting scenario analysis and modelling will provide a more robust framework to determine an appropriate tariff structure for the Industry in a dynamic macroeconomic environment such as Nigeria’s,” it said.
“In addition to the SRT, the primary regulator – the National Electricity Commission (NERC) – introduced a minimum remittance threshold for each distribution company which stipulates a mandatory payment that must be made to the bulk trader for electricity received.
“Furthermore, in February 2020, NERC introduced guidelines for ‘Merit Order Dispatching’ which involves ranking electricity generation and dispatch by the transmission company of Nigeria (TCN) in ascending order of costs with the cheapest electricity – such as those from Hydro plants with no fuel cost component – ahead of more expensive plants.
“The order also provides guidelines on the alignment of invoicing for capacity charge and energy delivered as well as a framework for the settlement of any imbalance between DisCos and TCN. The Merit Dispatching Order should eliminate the shift of responsibility for load rejection prevalent between DisCos and the TCN and improve the technical and operational efficiencies of these operators,” it also stated.
Concluding, Agusto said, “While operators are generally optimistic that the new tariffs and accompanying regulations would enhance efficiency and position the Industry on the trajectory towards achieving financial independence and ultimately improvements in the volume and quality of electricity supply.”
“In our view, to truly achieve the objectives of privatisation, reforms need to be accompanied by a strong and enabling regulatory environment.
“Furthermore, improved access to finance, efficiency in billing and metering as well as consistent and secure gas supply is vital to reap the benefits of privatization in the long run.
“While the journey to constant electric power supply remains far and long-winded, Agusto & Co believes the initiatives undertaken by the primary regulator – NERC– if consistently enforced have the potential to move the industry forward in the right direction,” it said.
By Adedapo Adesanya
Anambra State Executive Council (ANSEC), under Governor Charles Soludo, has taken a bold step to address the pressing issue of erosion in the state, while also recovering government lands and awarding strategic projects aimed at boosting the state’s economy and improving the quality of life of its citizens.
The Commissioner for Information, Mr Law Mefor, made this known after the 25th ANSEC meeting held recently at the Lighthouse, Awka.
He revealed that the meeting noted with grave concern the existential threat posed by erosion in Anambra, citing the careless actions of communities and regulatory bodies that have disregarded environmental regulations.
“The council has decided to step up enforcement measures to force individuals to build and manage storm waters from their houses and for communities to follow specific guidelines, such as building erosion barriers and excavating sand only in designated locations,” Mr Mefor stated.
He emphasised that the government will not hesitate to take stern action against individuals and communities that fail to comply with environmental regulations.
To address the issue, the government will enforce strict adherence to environmental regulations, mandate the construction of erosion barriers and proper sand excavation practices, and collaborate with relevant agencies to hold those responsible for the erosion menace.
It is also confident that with the support of the people, it will overcome the challenges posed by erosion and achieve its vision of making Anambra State a destination where economic and business activities thrive.
Furthermore, the council has resolved to form a committee to reclaim government lands in and around Anambra State that have been intruded upon and built upon without permission.
“The government will not stand idly by while its lands are being grabbed and misused. We will take all necessary steps to recover these lands and ensure that they are used for the benefit of the people of Anambra State,” Mr Mefor said.
ANSEC has also awarded several strategic projects aimed at enhancing the state’s infrastructure development.
The projects include the provision of a water supply to the Ekwulobia Flyover Bridge Fountain and the ornamental garden for Double NC Construction & Logistics Ltd; the installation of a 3-way traffic light, including pedestrian lights, at the Ifite-Amenyi intersection within the Awka metropolis to S.N.U. Ventures, and the supply and installation of two 10 kVA inverters with 15 kW lithium batteries at the Anambra State Civil Service Commission Building in Awka to Kennolly Enterprises.
Others include the supply and installation of transformer substations at Nnewi and Umueze-Anam communities for Aries and Gold Ventures Limited, and Aljovic Construction Limited; and the landscaping of the car park for the Trauma Centre at Chukwuemeka Odumegwu Ojukwu University Teaching Hospital (COOUTH), Amaku, Awka, for Triseconds Resources Limited.
By Modupe Gbadeyanka
The free delivery of premium motor spirit (PMS), otherwise known as petrol, across the country by the Dangote Petroleum Refinery will finally begin in January 2026. This was earlier scheduled for August 2025
This move, according to the Independent Petroleum Marketers Association of Nigeria (IPMAN), will bring down the price of the product in Nigeria.
The group has, therefore, urged all its members nationwide to patronise the Lagos-based private oil facility because it offers the best affordable price for all marketers.
Dangote Refinery has agreed to directly supply PMS to registered members of IPMAN, according to a statement signed and issued by the organisation’s president, Mr Abubakar Maigandi Shettima.
At a press conference held in Abuja yesterday on recent happenings in the oil and gas sector, IPMAN also applauded the support of the Chairman of Dangote Petroleum Refinery, Mr Aliko Dangote towards the federal government, which it noted has become evident in the regular reduction of the petroleum pump price.
“The association has the highest percentage of the supply chain of the PMS downstream sector, controlling over 80 per cent of the petrol retail market. We therefore declare that there will be no gap or scarcity in PMS supply to Nigerians.
“We are also excited at the recent agreement by the Dangote Refinery to begin the supply of PMS products directly to registered IPMAN members, and its free delivery to our filling stations anywhere and everywhere in Nigeria which will commence in January 2026.
“This will again, certainly lead to further decrease in the pump price of the products at our filing stations.
“Therefore, I am calling on all IPMAN members nationwide to prioritise patronising the Dangote Refinery in their purchase of PMS products, as they already offer the best affordable prize for all marketers today,” the group stated.
“At IPMAN we have no doubt as to the viability of the oil and gas policies being initiated by the federal government, and we have ceaselessly called and sought for enhanced cooperation across all levels of governance in the oil and gas sector. Hence, our repeated persuasion to always partner the Dangote refinery, to ensure the steady availability of PMS products.
“The focus of the Dangote & IPMAN partnership, has always been geared towards making life better for Nigerians. And of course, this blooming partnership would never have been possible without the pragmatic leadership of President Bola Tinubu, and his sound judgment in readjusting the leadership of the NMDPRA and the NUPRC.
“Our position has always been to deepen domestic refining in order to eradicate imports of petroleum products. Continuous import is NOT an acceptable parallel business model, because issuing import licenses recklessly distorts market dynamics, drains foreign exchange, enthrones poverty, destroys jobs, and scares potential investors away,” Mr Shettima was quoted as saying in the statement.
By Aduragbemi Omiyale
About $20 million has been put down by Swedfund to support efforts that limit climate change in Africa and help communities adapt to its effects.
The funds would be deployed by the Helios Climate, Energy, Adaptation and Resilience (CLEAR) Fund to back African companies that reduce emissions, strengthen resilience and create green jobs.
Swedfund’s investment is expected to contribute to significant cuts in greenhouse gas emissions and to help businesses and small farmers adapt to a changing climate.
The investment strengthens Swedfund’s work to drive a sustainable and inclusive green transition in Africa.
Africa contributes less than 3 per cent of global carbon emissions but faces some of the most severe climate impacts. At the same time, the continent’s energy demand is expected to triple by 2050.
Swedfund’s investment in Helios CLEAR will help channel capital to businesses that drive low-carbon growth in areas such as renewable energy, sustainable transport, climate-smart farming, efficient use of resources and digital climate solutions.
“By investing in this sector, we can reduce emissions, build resilience and create green jobs, all vital for sustainable growth that benefits more people.
“Africa currently receives only a small share of global climate investment, yet the potential for climate-smart business is enormous.
“Through Helios CLEAR we help build the next generation of African climate-focused businesses,” the Investment Director for Energy and Climate at Swedfund, Ms Gunilla Nilsson, stated.
Helios CLEAR Fund is a Pan African growth equity fund managed by Helios Investment Partners, one of Africa’s leading private equity firms.
The fund targets investments that deliver measurable climate mitigation and adaptation outcomes. The fund is supported by multiple development finance institutions.
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