The Association of Electricity Distributors of Nigeria (ANED), weekend called on the federal government on revisit the proposed investment of N72 billion in distribution assets, stressing that the concept as currently structured may not yield the necessary results.
The association faulted the agreement that that there was stranded 2,000 MW of electricity that was constrained by distribution network limitations on the basis of which the investment was initiated, stating that continuing on the foundation laid by the Transmission Company of Nigeria (TCN) and the Federal Ministry of Power, Works and Housing (MPWoH) would result in illegality.
A press statement issued by the director of research, Mr. Sunday Odunton, faulted the government’s decision to invest the said N72 billion describing the action as negating the Company and Allied Matters Act (CAMA) guidelines which stipulates a process for investing in a company.
According to ANED, “The guidelines for good governance require that any such investments be considered by the boards of the respective DisCos, relative to, and prior to the implementation of projects that may, potentially, result in adverse outcomes for their financial books and, ultimately, the shareholders.
“In this instance, it seems that the government’s ownership of 40 per cent of the DisCos seeks to unilaterally impose projects that have not been reviewed or deliberated by the board, on the 60 per cent majority ownership.
“Additionally, each DisCo has unique distribution network needs that must be addressed specifically.Lack of detail, beyond newspaper references or information, will not provide the best-value results that are associated with a tailored approach to such uniqueness. We believe that an initiative, however well-intentioned, should not result in a potential illegality.”
Faulting the allegations that the DisCos were unable to distribute a stranded 2,000 WM, the association said the TCN in the first instance, did not have the capacity to wheel the estimated 7,000 MW, on the basis of which, on a daily basis, 2,000 MW was stranded.
“TCN’s operationally tested capacity to transmit the energy that it receives remains at 5,300 MW. To date, TCN has only, on a one-time basis, evacuated or transmitted a peak energy of 4,577 MW (February 2, 2016). TCN’s capacity to transmit energy, daily, hovers within a range of 3,500 to 4,000 MW, with a predominance of transmission at the lower end of the range,” he said.
Odunton explained that the capacity to wheel any level of energy to be distributed by the DisCos was subject to the stability and availability of the transmission grid.
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