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Electricity Crisis: Agora Policy recommends reprivatisation of Nigerian DisCos for efficiency

*Agora Policy, an Abuja-based think-tank, urges improved electricity supply to consumers, proffering policy recommendations to the incoming administration on reprivatisation some of the Electricity Distribution Companies taken over by lenders due to core investors’ failure to meet the acquisition loan  repayment obligations

Isola Moses | ConsumerConnect

Against the backdrop of perennial power failure with disruptive, damaging effects on Nigerians, their homes, businesses and organisations for several decades, Agora Policy, an Abuja-based think tank, has proffered practical template to the incoming administration to reprivatise most of the country’s struggling Electricity Distribution Companies (DisCos).

ConsumerConnect learnt the Agora Policy has recommended ways the incoming administration could resolve issues dogging the significant power sector for long, Leadership report said.

In its policy memo titled, ‘Addressing Nigeria’s Lingering Power Challenge’, the think-tank said the centrality of adequate and reliable electricity supply to individual welfare, economic growth and overall national development cannot be overemphasised.

The organisation said various initiatives and reforms aimed at creating an optimal power sector for the country have fallen short.

Nigeria has largest energy access deficit globally: UN Report

Quoting World Bank data, Agora Policy said Nigeria has the largest energy access deficit in the world.

The organisation said 85 million Nigerian consumers, representing 43 percent of the West African country’s population, still do not have access to grid electricity.

While acknowledging the efforts that the government has made so far, Agora Policy, however, said the “little progress that has been made in the power sector since 1999 is neither at par with our population growth nor adequate for the energy needs necessary to achieve our economic potential.”

Power policy recommendations

Recommending policies for the incoming government, the organisation said there is a need for the government to stop thinking of installed generation capacity and start to think in terms of the amount of electricity delivered.

Agora Policy also stated: “This is an important paradigm shift with positive impact for government, as having such policy mindset changes the prioritisation and allocation of public and private resources to projects, interventions and initiatives across the electricity value chain that will increase the energy output, availability, reliability and quality of electricity delivered to end-users.”

Other policy suggestions include continuing with the implementation of the Muhammadu Buhari administration’s power sector programme; developing a new national electricity policy framework and amending the Electric Power Sector Reform Act (EPSRA); and establishing a standing high-level inter-ministerial energy committee.

Besides, the Think-tank advised the incoming administration to empower constituent states to develop sub-national electricity markets; improve the energy mix and address energy transition issues; resolve privatisation issues; and improve gas supply to the power sector.

It urged the authorities: “The incoming administration also needs to look at re-privatising some of the DisCos that have been taken over by lenders due to default by core investors in meeting the acquisition loan repayment terms to the lenders, or under some form of administration by the NERC and the CBN.

“The failed DisCos in administration should be broken into smaller franchise areas preferably along state boundaries, and privatised as new entities.

“Lastly, there is the ‘unspoken’ issue of the payment of the huge market debts in the sector. For instance, GenCos claim that they are owed over $1 billion by the NBET.

It is unclear how the new government would address the payment of these debts.

Agora Policy noted: “There is a temptation to delve into more tactical issues and challenges in the power sector such as resolving the metering gap, estimated billing, resolution of financial distress in the power sector and other operational issues affecting the electricity industry.

“Putting together the tactical plan to resolve the issues should be left with the power sector team to be assembled by the incoming administration.”

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