By Modupe Gbadeyanka
Consumers of electricity under the franchise network areas of Eko Electricity Distribution Company Plc (Eko Disco) have been assured of an improved supply.
This assurance was given by the Managing Director of Eko Disco, Mr Adeoye Fadeyibi, when the energy firm sealed a deal with the Niger Delta Power Holding Company (NDPHC) recently in Lagos.
Mr Fadeyibi explained that the desire to improve the quality of electricity supply to its customers triggered the collaboration with NDPHC, thanking the customers for their support and patience.
Eko Disco supplies energy to customers living around the Ibeju-Lekki area in Lagos and the Agbara Industrial area in Ogun State.
The deal with NDPHC is for the sale of up to 300MW of power from NDPHC’s power plants to customers in these areas within Eko Disco’s franchise areas.
The sealing of the transaction was witnessed by the Governor of Lagos State, Mr Babajide Sanwo-Olu, at the Lagos House, Marina.
The project will be structured to remove the commercial and technical inefficiencies in the Nigerian electricity market and will mobilise significant capital investment in transmission/distribution infrastructure and metering technology.
Commenting on the transaction, the MD/CEO of NDPHC, Mr Chiedu Ugbo, stated that the challenges in the industry inspired NDPHC to “source alternative means to sell and ensure dispatch of its stranded power generation capacity and explore innovative ways to unlock investment in infrastructure for improved supply to customers.”
The agreement signed between NDPHC and Eko Disco is only the latest milestone in NDPHC’s innovative and ambitious programme to tackle the industry-wide challenges in the Nigerian power sector.
Despite a significant installed generation capacity – estimated to be more than 13,000 MW – access to electricity remains acutely low because much of this installed capacity is stranded and cannot be conveyed to customers because of inadequate transmission and distribution capacity.
Operators insist that tariffs remain at a level that cannot guarantee returns for investors in the sector and as a result, an estimated $20 billion capital investment required to upgrade the transmission and generation infrastructure is not available.
Insufficient investment in metering, collection and surveillance, among other factors, has also made collections by the distribution companies inefficient, thereby causing revenue loss across the value chain.
A combination of these factors has led to severe liquidity shortfalls and a ballooning deficit in the market, and there simply is not enough collections from customers to cover the cost of power generation and delivery. The Federal Government has on several occasions intervened with financial bailouts to the sector, but this solution is only short term and is becoming an increasingly heavy burden on a cash-strapped government struggling with low oil prices and a struggling national economy.
