Privatization of Grid Will Lure Nigeria’s Power Consumers

The privatization of Nigeria’s generation and distribution sector will see many major customers return to the grid.
Published: Thu 29 May 2014

A more reliable source of power from Nigeria’s grid will see many consumers return to the utilities for their electricity,
says Oladele Amoda, Managing Director /CEO, Eko Electricity Distribution PLC at the African Utility Week 2014. He says that privatization of the power industry is seeing major service improvements and this, along with cheaper tariffs, will bring many major power consumers in the commercial and industrial sector back to using grid power.

Major improvements, thanks to privatization

Many big industries are generating their own power onsight due to the unreliability of the grid but. However, the generators that they are using cost a lot of money to operate. Therefore, if Nigeria’s grid can deliver a more reliable supply of power (and at a better rate), these consumers will be more than happy to use grid power instead, explains Mr Amoda. Issues like these will be discussed in detail at the Nigeria Breakfast briefing at the Africa Energy Forum 2014.

According to Mr Amoda, improvements are there already. Eko Electricity Distribution PLC, one of the 11 distribution companies that were privatized, is placing its focus on improving customer service. Customer response times have improved significantly. Before privatization, customers were forced to wait a long time before problems were resolved. He says, “Now we can hear what the customers’ needs are and try to develop our facilities in response. Our main focus is the customer so it’s important that we respond to their queries more efficiently and effectively.”

Meters to improve service and protect revenue

As part of its customer-centric business model, Eko Electricity Distribution PLC is in the process of implementing a full meter roll-out. Currently, only 50% of their customers have a functional electric meter. As the integrity of the meters is unknown, the company has decided to replace all of them-around 500,000.

The commercial and industrial sector, which provides 70% of the utility’s revenue, can expect to receive their meters by June this year. The residential sector will receive its meters once this this stream of revenue has been ascertained, explains Mr Amoda.

With the new smart pre-paid meters, the company will be able to protect revenue, improve asset management and enhance energy efficiency levels. This will all go towards keeping tariffs at reasonable rates and keeping the lights on, even during peak capacity.

To support this smart meter system, assets have to be rehabilitated or replaced and the network will need to see some major improvements. The infrastructure has been neglected for two decades and is calling for major improvements, explains Mr Amoda.

Eko Electricity Distribution PLC has committed US$ 45 million to the improvement of the network over the next 5 years. The majority of the money has been loaned from local banks.

In closing

We asked Mr Amoda for his take on the conference and the development of Africa’s energy development overall. His said, “Every year there are improvements in the sector and major progression within the African power industry. The conference gives us the opportunity to interact with other utilities around Africa to discuss issues and developments, and share best practices. The conference program is advancing every year.”