The Director General, DG, Bureau of Public Enterprises, BPE, Mr. Benjamin Dikki, last week said the Federal Government is initiating a 10-year tariff plan to provide a clear-cut environment for investment in the power sector.

This comes as the Managing Director, Eko Distribution Company, Mr. Oladele Amoda, said the DISCO spent over N52 billion to meter more than 600,000 customers in its network in four years.

Dikki made known the federal government’s intention while on an assessment visit to Eko DISCO in Lagos.

He said: “The intention is to have a 10-year tariff. NERC is working with the DISCOs to come up with a 10-year tariff that will provide clarity, definite environment for banks to be able to calculate the cash flows. The DISCOs will now be able to define their cash flows, moving forward, to be able to raise finance.

“Once these critical issues are achieved, the interest rate, foreign exchange rate, regulatory clarity and consistency and long term perspective, I believe we will have a robust power sector, attracting investments and funding on a consistent basis.

“People are willing to invest in power, but these are some of the issues creating the risk of perception. I hope these issues are being looked into by government and will be addressed shortly.”

The DG also noted that high interest rate is discouraging investment in the sector as investors pay as high 25 percent interest rate. According to him, “You cannot do power business and be paying interest on loan of 20 percent. To invest in a generating capacity, to build a thermal plant, you need a minimum of two years. If you take a loan at 25 percent interest per annum in two years that is 50 percent of the money. No power investor can make investments with that kind of high interest rate. Government must therefore provide low interest yielding facilities like it did for the manufacturing sector, through the Bank of Industry, BOI, to encourage investments in power.”

He explained that government has to create enabling environment, make the transactions in the sector bankable, so that power investors can access capital to make the necessary investments to increase the quantum of power and increase the ability to transmit and distribute the power.

However, the Dikki said the BPE has decided to conduct monitoring of the DISCOs and GENCOs twice in a year as noncompliance with the required obligations would attract sanctions.

“Monitoring is twice in a year. If any DISCO or GENCO is in persistent non-performance, government can take it over for $1,” he said.

Also, speaking, Amoda decried that Eko DISCO is faced with the challenges of vandalism and meter bypass, which has led to loss of revenue. To reduce the losses in the network and eliminate complaints, he said that smart meters are being by installed within its area of operation.