Eko Disco needs $1.1b to boost power supply in 10 years
…Targets 1000MW from embedded generation in two years
For the distribution company (Disco) to meet the needs of its customers, the Eko Disco has estimated an investment plan of about $1.1 billion (about N220 billion) to upgrade its facilities for the next 10 years.
The Chief Executive Officer of Eko Electricity Distribution Company, Mr Oladele Amoda, who disclosed this at the stakeholders’ consultative forum in Lagos, said the company would therefore need about 250 million dollars will be required in the next five years for network expansions and rehabilitation.
He said that over N10 billion had been spent so far on network rehabilitation, reinforcement, improvement and assets upgrade in the last few years.
Amoda however berated the poor energy allocation from the national grid noting that the company recently received about 250 mega watts from national grid as against 700 megawatts required. This, he said has forced the company to embark on massive load shedding to customers.
As part of its moves for a cost reflective regime that will spur investment, the company has therefore proposed an adjustment to electricity tariffs, as recommended by the Nigeria Electricity Regulatory Commission (NERC).
He said: “There is need to sustain continuous investment and that is why we have called for this meeting to consult with our customers on our proposed adjustment in tariffs to partly meet the reality of the prevailing economic situation.
“The company is being run at lost since inceptions because our investors had invested lots of money into the system which has no cost-reflective on the supply distribution chain to customers.
“When you look the economic indices, there is high increase in the rate dollars at the exchange rate market, while other things had also gone up. Most of our equipment like transformers, cables, lines among others, were been imported, the effect of rising in dollars had affected the cost the materials.
“Gas supply is also another issue which has also increased drastically by the gas suppliers because they feel reluctant to sell gas to industries due to price differentials,’’ he said.
Amoda noted that in the past, electricity prices have been lower than the costs of running the electricity businesses, therefore enough money were not spent to improve power supply.
He said that the prices in the past were supposed to cover cost but they did not cover all the costs of losses, adding that the losses are partly because of the old wires in the network.
“There is no way we can have stable power supply without adjusting our tariff, because currently we are running at lost.
“Expect government to stabilise gas prices and other things like importation that is the only way the adjustment could be recalled,” he said.
Amoda however informed of NERC’s awareness about the review, saying: “We cannot just commence on increase of electricity prices without informing the regulators which would in turn fix the appropriate tariffs pricing because it’s ten years tariff plan.”
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