The Association of Electricity Distribution (ANED) in Nigeria has faulted the statement credited to a business mogul, Alhaji Aliko Dangote, the president of Dangote group that the power privatization should be reversed by the federal government.
Dangote had last week in Jos said that the power privatization was done wrongly and should be reversed.
He said the problem in the sector has persisted despite privatization because the buyers lack understanding of the complexities of the power sector.
At a press briefing in Lagos yesterday the investors under the umbrella of ANED faulted the claims of the business man,saying it is far from the reality in the power sector.
Executive Director, Research and Advocacy of the association, Sunday Oduntan who addressed the press alongside other officials, noted that the power sector has been bedeviled by a number of challenges that would make the most hardened risk-seeking investor to run in opposite direction.
Oduntan who argued that the DISCO’s and GenCo cannot solved the problem in the sector which has been on within three years of it existence, listed the absence of a cost recovery regime, customer non-payment of their bills, gas supply limitation, gas pipeline vandalisation and limited transmission capacity as among the challenges facing the power sector.
“If the GenCo and DisCo investors are to be accused of anything, it is that they believed in their country and had a strong desire to put their money at risk, behind that belief, rather than those who may be considered nothing more than armchair experts, with a reluctance to dip their toes in the water,” he said.
On the issue that the lack of injection of adequate capital by the investors, Oduntan stated that most of the generation assets were sold outright with the sale of the distribution assets structured on a 30 percent to 70 percent equity and debit split.
He faulted the assertion by the business man that the investors went into the business without knowing what they are doing, saying “it will be difficult for anyone to suggest that people, seasoned and successful investors, who committed $2.3 billion of their money, 30 percent or $690,000 of which is equity, did so without knowing what they were doing.
According to him, the bigger challenges to the privatization of the sector are adverse macro-economic changes, regulatory uncertainty, and lack of respect for contract sanctity and government inconsistency policy among others.
Oduntan said in spite of the challenges, the DISCO’s have made a number of progress, including reduction of technical and commercial losses, improved on the billing system, creations of call centres for over 2 million queries from customers and recruited thousands of skilled personnel.
