Long Term Funding Needed For Discos To Stabilize Power Sector

Long Term Funding Needed For Discos To Stabilize Power Sector

The Head of Energy Research, Ecobank Group, Mr. Dolapo Oni, has said the the Distribution Companies (DISCOs), need a long term funding plan to enable stability in the sector, Vanguard reports.

He stated: “Where the bulk of the problem lies in the sector is on the distribution end. Even though we have 6500 mw that can be generated today, the DISCOs can only take 3700mw, they turn down over 2000mw on a daily basis. They feel they are going to lose a lot of money if they take the electricity that’s being transmitted to them. They are also worried about customers paying for it, as well as how much they are going to lose in terms of their own distribution infrastructure.”

“Funding of power as a structure in any country requires long-term funding. The problem we are facing today as a nation is that we channel short term funds to the sector, like five to seven years funding, which is a mismatch. When you combine the fact that you don’t have the right kind of tariff in place that will give you back your expenditure, it becomes difficult for you to attract the kind of funding needed in the business,” he added.

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