Experts Support FG, W/Bank On DisCos’ Audit Before $500m Loan
Experts in the Nigerian Electricity Supply Industry (NESI) have backed the plan of the federal government and the World Bank to run a forensic audit on power Distribution Companies (DisCos) before they could access a $500 million loan.
Economic Confidential reports that between 2016 and 2017, the Nigerian Electricity Regulatory Commission (NERC) had applied the Open Book policy on DisCos’ accounts after audit reports showed that the DisCos revenue collection was not that bad as previously assumed.
In a latest report of a meeting with NERC and other stakeholders, at least 10 DisCos have said they will only allow the forensic audit of their activities if NERC and the World Bank (which were to do the audit) extend it to a power system audit encompassing the entire value chain of the sector rather than isolate DisCos alone.
If things go well, the World Bank said it had over $500 million DisCos’ credit facility for power supply improvement, already approved by its International Development Association (IDA).
DisCos argued that the auditors to be used must be neutral and called for a comprehensive system of the sector. “We recommend a system audit for the entire power sector value chain.”
Our Correspondent obtained a letter by some Generation Companies (GenCos) to NERC which had recommended DisCos’ audit and The Revenue Stream Audit Paradigm (TRAP) system, to track DisCos’ revenues.
Presently, GenCos get below 30 percent remittance from DisCos for their energy bill; but DisCos blamed this on poor collection from customers, inappropriate tariff, among others.
A management source from a GenCo called for transparency in the electricity market. “Currently, the DisCos remain the only source of revenue inflow,” the official noted.
The Executive Director, PowerUps Initiative, Adetayo Adegbemle, said, “By market design, DisCos are the money collectors of the market. If the market thinks that there is some form of financial improprieties, NERC, pursuant to section 32, 96 has such powers to conduct that.”
However, President of the Nigeria Consumer Protection Network (NCPN), Kunle Olubiyo, supported the DisCos, saying: “As good as the audit may sound, I think a mid-term review of privatisation exercise will address all these anxieties and fears.”
