Distributed Generation and Tax Credit Scheme – A Pathway to Reliable Power in Nigeria?
It has been almost a decade since the erstwhile, wholly Government owned, utility monopoly was handed over to private sector players. It may be considered sufficient time for the country’s power issues to be confined to history, though quite several people will argue that this isn’t the case yet. Power supply, though having improved since then, still appears erratic. Popular opinion may lay the blame across the entire value chain from Government to the private sector players now in charge of the successor companies. However, the focus should always remain on how we can continue to improve the operations of these Companies and consequently power supply to industries and individuals.
One major challenge to improve supply that has been identified by players in the industry as significant is funding. Tariffs prior to privatisation was reflective of most Government run businesses without much consideration for economic sustainability. It was widely accepted by all parties that it would take time for Nigerians to get use to paying value for power, given the number of decades that had passed where they had enjoyed highly subsidised power. Furthermore, it was acknowledged that any conversation about cost reflective tariff can only be had under a climate where power had improved significantly, and people could better understand why they had to pay more and for what. It is debatable if the actual cost of investments in power infrastructure required to achieve this degree of improvement was ever considered viz the ability of the private players to raise the money from internal and external sources whilst running huge loss-making ventures and huge cash collection issues.
