The Minister of Power, Works and Housing, Mr. Babatunde Fashola, has provided more insight on the Federal Government’s N72 billion financial facility for the 11 electricity distribution companies or Discos for upgrade and expansion of their networks.
Fashola said the fund would be a shareholder loan which the Discos must be willing to match, adding that if the Discos failed to do so, the fund would be converted to equity.
By the privatisation terms under which the government sold the national power assets to the Discos, government retained 40 per cent shareholding in the ownership of the assets while their core investors maintained 60 per cent.
The minister explained that government, as a 40 percent shareholder, had to make the N72 billion approval in order to enhance the distribution of power across the country, pointing out that although operationally, there was 7,000 megawatts of electricity ready for deployment, the operation was still constrained at the distribution end.
Reiterating the concern of government towards correcting the anomaly, the minister said the decision to intervene was done after asking the Discos where they would want to spend their money within their franchise, if they have it, that could evacuate “some of the power that is available and that can yield a maximum collection report”.
He added that it was with the data that the government put the amount together for injection into the distribution sector.