Nigeria’s DisCos illiquid as electricity attracts major investments globally

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Electricity Distribution Companies (DisCos), which interface with end-users, occupy a critical position in Nigeria’s power value-chain but struggle to stay afloat because of illiquidity and a stifling legal framework, while electricity continues to attract the largest energy investments, globally.

On July 17, 2018, Alex Okoh, director general of the Bureau of Public Enterprise said most of the DisCos are technically insolvent. Globally, the scenario is different. According to Paris-based International Energy Agency (IEA), in a report ‘World Energy Investment 2018’, 2017 was the third consecutive year of decline in global energy investment with energy efficiency the lone sector of growth.

Despite a 6 percent decline in spending, the electricity sector again attracted the largest share of energy sector investments, exceeding the oil and gas industry for the second year in row, as the energy sector moves toward greater electrification. But In Nigeria the DisCos have failed to attract adequate investments because of their debt burden and lack of competitive tariffs.

Source: Business Day

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