The French Agency for Development (AFD) says the 11 electricity distribution companies (DisCos) in Nigeria will need an investment of $10billion to improve power supply in the next five years.
AFD said it commissioned AF Mercados, a consultancy firm, to carry out an in-depth study of the challenges of the Nigerian Electricity Supply Industry (NESI) with the support of the European Union (EU) with the aim of finding a way forward.
The agency noted that the consulting firm worked with the DisCos and other stakeholders in the industry since mid-2017 while conducting the study.
Presenting the report at a conference in Abuja on Monday, Jose Guerra, team leader at the consulting firm, said the study would help policymakers to make the right decisions in the electricity industry.
AFD lamented that despite the investments by the agency and other development partners in the industry, it has not witnessed improvements since the privatisation of the sector.
“According to the best estimates, the 11 Discos operating in Nigeria would need more than $10bn in five years. Also, innovative financing solutions must be devised, possibly involving new players,” the study said.
The agency added that the reason behind the shortfall amounting to $3 billion in the industry could be linked to the absence of a cost reflective tariff, dissatisfaction by customers and non-performance in general.