MR Sunday Oduntan, the Executive Director and Chief Executive Officer of Association of Nigerian Electricity Distributors (ANED), says high commercial lending rates make financing power-sector infrastructure difficult.
Speaking in an interview with the News Agency of Nigeria (NAN) on Tuesday in Abuja, Oduntan called for concessional or “”patient capital”.
According to him, investors and lenders are reluctant to provide capital where there is insufficient assurance that can recover their investments.
He called for increased investment, stronger commercial discipline and comprehensive reforms in the electricity sector.
The expert expressed concerns over the difficulty in attracting new investment into the distribution sector.
He identified regulatory and policy inconsistencies as another factor undermining investor confidence and private-sector participation.
Oduntan said the country’s electricity sector remained structurally misaligned, adding that distribution operations were disconnected without a unified commercial framework.
“The transmission network remains a major bottleneck in the electricity value chain, requiring urgent investment and modernisation to improve the available power to consumers.
“There is a need for the reinforcement and modernisation of the national grid, increased capital investment in transmission infrastructure and substations,” he said.
Oduntan called for the deployment of smart-grid technologies, including Supervisory Control and Data Acquisition (SCADA) to improve real-time monitoring, control and management of the transmission system.
He said the grid management should be prevented from political interference, adding that stronger commercial and technical management would improve the efficiency and reliability of the electricity system.
He also proposed greater private-sector participation in transmission through structured public-private partnership (PPP) models.
The expert recommended decentralisation of the electricity system through regional or zonal networks where technically and economically feasible, while strengthening real-time system operations.
At the distribution end of the electricity value chain, Oduntan observed high technical and commercial losses, inadequate metering, poor service quality as major challenges confronting Distribution Companies (DisCos).
He said frequent outages, low voltage and unreliable electricity supply have also weakened consumer confidence.
He also said low revenue collection had limited the capacity of DisCos to invest in network expansion, maintenance and service improvements.
On recommendations, Oduntan called for a coordinated approach across the entire electricity value chain, anchored on stronger commercial discipline, transparent financial arrangements, increased private-sector investment and effective regulation.
According to him, a reliable electricity supply is essential to Nigeria’s industrialisation, job creation, economic growth and improved living standards.(NAN)(ww
Tags: Commercial lending rate Financing power sector
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