Chris Steven, Abuja
As part of measures to address the problem of inadequate liquidity in the electricity industry, Minister of Power, Works and Housing, Babatunde Fashola, has advised owners of assets in the power sector especially in the distribution arm of the electricity value chain to embrace new commercial behavior suitable for operating optimally in the new commercial environment of the sector.
The Minister gave the advice in Abuja while receiving a delegation from the Nigeria Economic Summit Group (NESG), led by its Vice-Chairman, Mrs. Sola David-Borha.
He said power asset owners should be ready to bring in more funds by offering to dilute their stakes in exchange for sorely needed inputs like meters, transformers and other equipment required for systems upgrade, insisting that it would make more business sense to give up some shares in exchange for funds and capital.
The Minister reiterated that if this advice is acceded to, it will make for redistribution of their risk assets in exchange for equipment and capacity to drastically reduce the prevailing high occurrences of commercial and technical losses.
He further reminded the power asset owners that the success of the privatization exercise of the sector solely rests on the distribution end in the value-chain urging them to step up their collections, so as to meet the time-lines agreed with Government for all parties to respect agreements and take full responsibility for their actions.
The Minister commended the leadership of NESG for expressing willingness to partner with his Ministry in proffering solutions to the challenges facing the sector through constant engagements with the NESG/Private Sector led economic think-tank working on the three main sectors under his purview, which are critical areas of growth and development in the nation’s economy.
He enjoined distribution companies to brace-up in overcoming some of the challenges currently faced by the power sector, while also reminding Nigerians that the new tariff regime which is cost-reflective is not to short-change customers but to improve on the level of liquidity available to the entire electricity value chain.
Speaking earlier, leader of the group, Mrs. David-Borha appealed to the Minister to assist in the areas of enabling legislation that would reduce conflict in the course of implementing projects conceived under private public partnership.
She also requested that Government should tackle some critical roads that would guarantee traffic flow, which she said has been a major concern for investors.
While she commended some Government initiatives which would assist a great deal in making power projects bankable, Mrs. Borha said the present drive embedded generation and off-grid power solutions are all steps in the right direction.