Key Points
- House committee urges seven indebted DisCos to settle outstanding market obligations.
- Lawmakers say improved liquidity is necessary for a sustainable electricity market.
- NISO says stronger collaboration is needed to address the sector’s financial challenges.
Main Story
The House of Representatives Committee on Power has urged seven indebted Electricity Distribution Companies (DisCos) to urgently settle their outstanding obligations to the Nigerian electricity market.
The committee chairman, Rep. Victor Nwokolo, made the call on Wednesday during an oversight visit to the headquarters of the Nigerian Independent System Operator (NISO) in Abuja.
The lawmakers visited NISO to assess its operations and performance and witnessed a public hearing on the outstanding market obligations of the Ibadan Electricity Distribution Company (IBEDC).
The hearing was chaired by NISO Executive Director, Market Operations, Mr Edmond Eje, as part of the system operator’s engagements with selected DisCos over outstanding obligations, events of default and other compliance issues in the Nigerian Electricity Market.
Nwokolo expressed concern over the accumulation of debts by some DisCos, saying improved liquidity was necessary to strengthen the electricity market and sustain the power sector.
He urged IBEDC and other indebted DisCos to make every effort to settle their obligations and comply with the rules governing the electricity market.
The DisCos identified as having outstanding market obligations are Benin, Enugu, Ibadan, Jos, Kaduna, Port Harcourt and Kano.
The Issues
Outstanding market obligations affect the financial position of participants across the electricity supply industry and can limit their ability to meet their own obligations.
NISO Managing Director, Abdu Mohammed, said improved liquidity would enable market participants to meet their financial commitments, sustain operations and ultimately improve electricity service delivery.
The oversight visit also gave lawmakers an opportunity to examine NISO’s role in the Nigerian Electricity Supply Industry (NESI) and the challenges affecting the electricity market.
What’s Being Said
“Improved liquidity was necessary to strengthen the electricity market and ensure the sustainability of the power sector.” – Rep. Victor Nwokolo, Chairman, House Committee on Power.
“Improved liquidity would enable market participants to meet their financial obligations.” – Abdu Mohammed, Managing Director, NISO.
“Stronger collaboration among the National Assembly, NISO and other stakeholders in NESI” is needed to address the structural and financial challenges confronting the sector. – Abdu Mohammed, Managing Director, NISO.
What’s Next
NISO said it would continue engagements with selected DisCos on outstanding market obligations, events of default and other compliance issues.
Mohammed also called for continued support and constructive oversight from the National Assembly, saying sustained collaboration among stakeholders was necessary to strengthen the electricity market.
He said such collaboration would also support efforts to stabilise the national grid and improve the reliability and sustainability of electricity supply.
NISO is also implementing a five-year development plan focused on strengthening system operations, improving electricity market operations, enhancing system planning and coordinating Nigeria’s power system.
Bottom Line
The House Committee on Power wants seven DisCos to clear their outstanding electricity market obligations, citing the need for stronger liquidity across the sector. NISO says resolving the financial and structural challenges is important to sustaining market operations and improving electricity supply.
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