According to Executive Director of Association of Nigerian Electricity Distributors (ANED), Sunday Odunton, General Electric (GE) has set stringent conditions for its potential investment in Nigeria’s Electricity Distribution Companies (DisCos). The major condition GE is demanding for is the provision of a Sovereign Guarantee from the Federal Government so that in case of any infraction, the FG will have to cater for any potential losses.
This very stringent condition comes as a result of what was termed as “the dismal nature of the Nigeria’s power firms’ balance sheets” after GE had a meeting with the stakeholders involved. “In the case of the General Electric, it happened Tuesday. They wanted to know how the sector is doing in terms of doing business. So they are trying to see how they can come in. They have a lot of money to invest. They wanted to know the challenges like the issue of metering, network and others….[GE] wanted to know how impressed the sector is. As soon as he saw the balance sheets, he said No! No! He said if the government can provide what is called sovereign guarantee, yes!”
However, there is still hope that the deal will go through as Odunton said the meetings are still ongoing. Whether this means that the FG is ready to provide the sovereign guarantee or that GE is willing to negotiate milder terms, no one knows yet.
