Divest your shares to raise funds, Fashola tells Discos

…As PETAN expresses frustrations over $500 NCF

IN the quest to address the problem of inadequate funding in the electricity industry, the federal government has advised owners of assets, especially in the distribution arm of the electricity value chain, to embrace new commercial behaviour suitable for operating optimally in the new commercial environment of the power sector.

While receiving a delegation led from the Nigeria Economic Summit Group (NESG) led by its Vice-Chairman, Mrs Sola David-Borha, Minister of Power, Works and Housing, Babatunde Fashola said Distribution companies should divest their equity shares to raise funds for necessary inputs like meters and transformers which are desperately needed in their areas of operations.

He said 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.

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He further reminded the power asset owners that the success of the privatisation exercise of the sector solely rest on the distribution end in the value-chain hence, they should 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.

Speaking further, Fashola assured that government is on-course regarding tackling gas to power through the gas master-plan in conjunction with all relevant agencies, while also working on a modular model for the proposed reform of the transmission grid adding that the nation’s network as currently configured must be changed to bring in more private sector participants.

Meanwhile, Indigenous oil and gas companies, under the aegis of Petroleum Technology Association of Nigeria, PETAN, have expressed frustrations over their inability to access over $500 million that had accrued in the Nigerian Content Fund, saying this had put them in a disadvantage position in the execution of projects in the industry.

Speaking at the Offshore Technology Conference, OTC, taking place in Houston, Texas, Chairman of PETAN, Mr. Bank-Anthony Okoroafor, said making the fund accessible to indigenous companies would create big companies that will compete with others in the world.

He said: “Today, the local content fund is more than $500 million. If every year you bring out about $50 million, in the next five years, we will create Daewoo, Samsung, Saipem. This is how big companies are built.

Okoroafor, who decried the high interest rate in Nigerian banks, which has prohibited PETAN members from expanding their scope, urged government to make the content fund available, so as to enhance capacity building.