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Liquidity: Electricity sector generates N272.47bn in six months
On DISCOs collection efficiency Q3’20
By Obas Esiedesa
Electricity market revenue grew by 10.55 per cent to N272.47 billion in the second half (July-December) 2020, compared to N246.46 billion generated in the corresponding period of 2019, according to the latest industry data obtained by Energy Vanguard.
The growth followed an intervention from the Presidency through the Central Bank of Nigeria, which imposed restriction on revenue collection bank accounts of Electricity Distribution Companies, DisCos.
The intervention meant that the bank accounts were locked, with cash allowed to come in but withdrawals by DisCos blocked.
Over the years, the DisCos have been accused by other industry operators of spending the industry’s revenue on their own operations to the detriment of others.
Electricity Generation Companies in the country (GenCos) have said Nigeria can generate 30,000 megawatts of electricity, meeting an earlier target set by the Federal Government.
The projection could however remain elusive without pragmatic framework, which must be implemented commercially and politically. Seven years after the electricity sector was privatized average generation has been dismal, hovering around 3,500WM although available capacity stands at about 8,000WM as at 2020.
The Executive Secretary of the Association of Power Generation Companies (APGC), Joy Ogaji, said progress would be made if policymakers, regulators and relevant stakeholders join hands in recognising and paying for available capacity, going by extant pacts between GenCos investors and the Federal Government.
•CBN, NERC intervention meet deadlock
Despite the intervention of Central Bank of Nigeria (CBN) and Nigerian Electricity Regulatory Commission (NERC) to address the liquidity crisis rocking Nigeria’s electricity market, the sector continues to struggle under heavy debt.
Being the revenue collectors in the market, NERC had, last year, set a minimum market remittance threshold payable by the 11 power distribution companies operating across the country.
NERC mandated the DisCos to make 100 per cent remittances to the Transmission Company of Nigeria (TCN)’s Market Operator (MO), repay loans to CBN and remit some percentage to Nigerian Bulk Electricity Trading Company (NBET) monthly.
Chineme Okafor writes that in addition to its perennial low-level efficiency, Nigeriaâs power sector had the COVID-19 pandemic to deal with in 2020
On December 27, three days before the curtains finally draw on 2020, data obtained from the office of the vice president, Prof. Yemi Osinbajo, revealed that the average volume of power generated and distributed to Nigerians from the national grid within the year was 4,045 megawatts (MW) daily, about 264MW more than the 3,781MW that was reported the same time in 2019.
Similarly, an average of 3,644MW could not get to the grid daily within the year while N640 billion was unearned as a result of the sectorâs inefficiencies.