The Association of Nigeria Electricity Distribution Companies, (ANEDC) says the adoption of a cost reflective tariff remains the solution to the challenge of liquidity in the nation’s power sector.
The Chief Executive Officer of ANEDC, Mr Azu Obiaya, told the News Agency of Nigeria (NAN) on Wednesday in Abuja that this would also put to rest the high volume of market shortfall in the sector.
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“There has to be a cost reflective tariff for the sector to become robust and commercially viable.
“There has to be cost reflective tariff for the DISCOs to be able to make the capital investment that will turn around the sector that has been moribund.
“There has to be a cost reflective tariff for all the operators to be able to recover their cost of doing business.
“If that does not exist, then we will continue to experience the significant market revenue shortfall that we are currently experiencing.”
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He said that the inability of the DISCOs to pay for the electricity allocated to them was due to non-reflective tariff in the sector.
“For instance, there are two minor reviews or adjustments to the tariff that should have been done since June 2016 that have not been done.”
Obiaya also told NAN that the Federal Government’s plan to make N701 billion available for the sector would boost liquidity and the supply of electricity to Nigerians.
“We believe that it is a good start; indeed anything that can be done to essentially mitigate the financial stress of the GENCOs and the gas suppliers is a good thing.’’ (NAN)
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