Nigerians may pay more for electricity as govt shops for $4.7bn to boost DisCos

There are indications that Nigerians may have to pay more for electricity as the federal government embarks on plans to boost the operations of electricity Distribution Companies (DisCos).

The Transmission Company of Nigeria (TCN) revealed on Monday, that the Federal Government is shopping for $4.7 billion to recapitalise the DisCos.

The company’s Managing Director Usman Gur Mohammed said this while speaking to newsmen in Abuja on Monday

He added that the cash will be raised by the Federal Government, shareholders of the DisCos and private investors, to upgrade power distribution facilities.

He noted that the Federal Government will inject $1.7 billion into the DisCos. Private investors will pay up the balance that is proportional to their 60 per cent equity in the companies.

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Mohammed said: “This money can be raised. The government was about to collect $1 billion from the Word Bank for DisCos to finance the capitalisation of the DisCos. The AfDB (African Development Bank) and others are talking about another $1 billion for distribution expansion.

“NERC should do a regulation consistent with the declaration of ECOWAS directive that all procurement of DisCos and transmission should be done competitively so that this money that will come in, and it will not be squandered by people giving contracts to their cousins and wives.”

He stressed that private investors would not raise their loans from commercial banks, saying that “this money has a repayment period of about 20 years and a moratorium period of about five years”. “So, they (private investors) should bring the same type of money”.

The TCN boss said: “Tariff may go up as a result of the fact that there is going to be repayment of those capital and also payment of interest.”

By Babatunde Alao…

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