Nigeria: Report Discos Asking You to Buy Transformers to Nerc – Nebo

Professor Chinedu Nebo was Vice Chancellor of the University of Nigeria, Nsukka prior to his appointment as Minister of Power in February last year. He oversaw the privatisation of the sector last November, and has been under the spotlight in recent months, because consumers feel there is little progress in the sector, in terms of power supply to end users. In this interview with Senior Reporter, OBAS ESIEDESA in Abuja, he bares his mind on the challenges facing the sector and how government is working hard to resolve them. Excerpt:

Looking at the myriad of challenges facing the power since the handover to new owners last year, is there any that was not foreseen at that time?

This is not really an easy question because the privatis ation process was done in a way that really baffled the entire world. People had expected that there would have been a graduated privatization process or a phased privatization process that would allow government take into account the possible hiccups and teething problems but government courageously decided to do an all-encompassing privatisation exercise.

In fact it is regarded as the largest privatisation exercise globally and most people in the world have adjudged it especially our development partners as a very bold, courageous and yet transparent exercise. So some of the things that we had not quite thought through completely before then that are accounting for some of the teething problems we have now is that the companies that purchased these very plants are over extended (over-borrowed). Many of them are over extended with regards to their financial situation which means that they do not quite have the credit facility they need to do the kind of expansion of the facility that they have purchased or inherited.

In addition to that, they are not quite buoyant enough to carry through their business plans the way that had been foreseen, and part of the reason is that, for the first time, the Nigerian banks came on board… Nigerian banks showed that they had come of age and they could completely bankroll the entire process which is wonderful, which is actually fantastic. They were looking at it that foreign banks were not allowed to do what they did during telecom sector privatisation. So we are happy.

But again, one needs a very solid liquid (financial) market to keep the process moving ahead in a way that it will be seamless… In a way that all that they have in their business plans they could actually execute. So some of them had not quite addressed the issues ab initio that they were going to be over extended to the point where credit facility might not be easy to get.

And so because of that, there is a little bit of slowdown with regards to expansion of the facilities.

Beside the low quantity of power supply, consumers generally expected improved services from the new owners, but the story is still the same. Customers continue to provide transformers, poles and cables. Are you satisfied with the performance of the new owners?

In that regard, that is being contextual with regard to your question, nobody will be happy that in a privatised market, people are buying their own transformers. We need to be told these things so that we get the Nigerian Electricity Regulatory Commission (NERC) to get on their backs because people are not supposed to be buying their own transformers, but they need to get NERC to know these things. It is unfortunate but it should not happen.

But generally with regards to improvement of power, yes there is improvement in many areas. People occasionally are sending us messages of satisfaction that they are seeing more power than they had seen before. People who hadn’t had power for two months… some of them are saying they were now getting power. About a week ago we had so many text messages coming in showing that they are getting much more than they use to get before.

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