Nnaji: Why DisCos Failed to Provide Adequate, Stable Electricity Supply to Nigerians after Privatisation

The Chairman and Founder of Geometric Power and former Minister of Power, Professor Barth Nnaji, has identified infrastructure deficits, revenue losses, liquidity crises, and systemic bottlenecks as the reasons behind the Electricity Distribution Companies' (DISCOS) failure to deliver stable electricity to Nigerians since the 2013 sector privatization.

Nnaji criticized the government for reneging on promises to allow cost-reflective tariffs, which led to the lack of investor interest in the power sector. He stated that tariffs were raised from N6 to N22 for certain categories of Nigerians, while the urban poor and rural dwellers retained N6 and N4 per kilowatt-hour, respectively.

Despite the new tariffs, they were not cost-reflective, which discouraged potential investors. Nnaji emphasized that the government must either approve cost-reflective tariffs or be prepared to subsidize DISCOS' operations, as government subsidies are more burdensome than fuel subsidies. He highlighted the high costs of power plant installation and maintenance, as well as the absence of a partial risk guarantee, which discouraged investors from funding new power plants.

Nnaji lamented that despite 11 years of growth, no new power plants have been built since the partial risk guarantee was suspended in 2015, and only one plant, Azure Power in Edo State, was added to the grid.