The African Development Bank (AfDB) says it is currently talking with the Federal Government to agree on how to write off legacy debts owed by the nation’s power sector operators with a view to recapitalising them.
Acting vice president for power, energy, climate and green growth, Mr Wale Shonibare, made this known while speaking on the sidelines of the ongoing annual meetings in Malabo, Equatorial Guinea.
“We are looking at how we can work to repair the balance sheet of the distribution companies,”.
“Everybody has to own up to the issues because there are regulatory issues and other things the government needs to do in terms of recapitalising the sector to get rid of legacy debts so we are talking to all the stakeholders.”
Shonibare said the AfDB is also working on a $400 million loan for the Transmission Company of Nigeria.
“We are working with the Rural Electrification Authority in terms of the evacuation of power. We are working with the TCN to process a transmission expansion loan which will ultimately run into $400 million. The loan will be disbursed in two parts. The first part will be approved this year, close to $200 million,” he explained.
“The loan is tied to the transmission grid starting from the north-west and the Niger Delta region. Phase two is looking at the northeast particularly the areas where we are facing significant challenge right now.”
On how to achieve sustainable power in Nigeria, the AfDB vice president, advocated cost reflective tariffs that are in tandem with cost of supplying electricity to solve the liquidity challenges of the sector.
Shonibare however advised that power vendors must improve on the quality of electricity supply before embarking on any tariff review
“Everybody understands that there is a liquidity issue in Nigeria and it stems from the fact that distribution companies are unable to pay the entirety of the invoices they are getting for the power that they are taking from NBET,” he explained.
Meanwhile, Dr Akinwumi Adesina, President of the African Development Bank (AfDB), has urged African governments to work towards eliminating non-tariff barriers in the region to hasten Africa’s integration.
Adesina said this at the former opening of AfDB) Annual Meeting, with the theme; “Regional Integration for Africa’s Economic Prosperity’’ in Malabo.
“Pulling down non-tariff barriers alone will spur trade by at least 53 per cent and potentially double trade.
“The free movement of people and especially labour mobility are crucial for promoting investments.’’
He said that as part of efforts to accelerate investments and mobilise greater resources for Africa, the Bank supported by its partners inaugurated the Africa Investment Forum which held for the first time in Johannesburg in 2018.