TCN plans to offset loans by having Nigerians pay for it

Electricity consumers in Nigeria may soon be forced to pay more tariff to the Transmission Company of Nigeria (TCN) in order to facilitate the company’s efforts to raise enough capital to offset its debts.

Moreover, the company’s management believes that the consumers currently pay lower tariffs than they are supposed to. Therefore, there is a need for an “extraordinary tariff review”.

Already, a proposal to this effect has  been sent to the Nigerian Electricity Regulatory Commission (NERC) since last year. But no approval has yet been given.

TCN’s Chief Executive Officer, Mr Usman Mohammed Gur, recently lamented over the situation with the new tariff, wondering why “unfortunately up till now, it has not been approved.”

Meanwhile, a source at TCN who spoke on condition of anonymity, expressed high hopes that the new tariff plan would indeed be approved soon. The tariff will also facilitate debt settlement.

“What we want to assure Nigerians is that once we have cost reflective tariff the loan we are taking is not going to be a burden on the nation. TCN will pay its own loan. I want you know that the Eurobond we took, TCN is paying the loan, it is not allowing government to pay. We are on track on paying that Eurobond.”

Note that under the current tariff, the Transmission Company of Nigeria receives an average of 40% of the electricity market’s monthly revenue.

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The average Nigerian household spends about N10,000 monthly on electricity per month. But this is mostly for services not rendered because the epileptic power supply is the norm.

About Transmission Company of Nigeria

The TCN manages Nigeria’s electricity transmission network. It is one of the 18 companies that was unbundled from the defunct Power Holding Company of Nigeria (PHCN) in April 2004 and is a product of a merger of the transmission and system operations parts of PHCN.

Source: Nairametrics

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