Finance Ministry Takes Over FG’s Stake in Ikeja Electric, AEDC, KEDC, 8 Other DisCos

• The coordinating minister of the economy and minister of finance directed that the BPE be revoked of the power of attorney.
• MOFI would also take ownership, control, and manage all outstanding federal government equity in all electricity companies.
• It stated that the move would ensure best corporate governance practices and ultimately maximise the value derived from the electricity assets

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.

The Ministry of Finance Incorporated (MOFI) has formally taken over the federal government’s 40% equity stake in 11 successor Electricity Distribution Companies (DisCos).

The discos include Abuja Electricity Distribution Company PLC (AEDC), Benin Electricity Distribution Company PLC (BEDC), Eko Electricity Distribution Plc (EKEDC), Enugu Electricity Distribution Plc (EEDC), Ibadan Electricity Distribution Plc (IBEDC), and Ikeja Electricity Distribution Company (IKEDC).

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Others are Jos Electricity Distribution Plc (JEDC), Kaduna Electricity Distribution Plc (KAEDCO), Kano Electricity Distribution Plc (KEDC), Port Harcourt Electricity Distribution Plc (PHEDC), and Yola Electricity Distribution Company Plc, (YEDC).

Daily Trust reported that the action was in response to a directive by Wale Edun, the coordinating minister of the economy and minister of finance, that the Bureau of Public Enterprises (BPE) in the electricity successor firms be revoked of the power of attorney.

The BPE earlier stated that the federal government's remaining 40% stake in electricity distribution companies (Discos) would be put up for sale on the capital market in 2024.

MOFI takes charge

In a statement, Dr Armstrong Takang, the managing director and chief executive officer of MOFI, stated that its directors were also required by the same order to take ownership, control, and manage all outstanding federal government equity in all currently operating electricity successor companies.

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He pointed out that MOFI has undergone significant changes over the last 24 months, most notably the amending of the MOFI Act by the Finance Act, 2023.

He explained that this transformed it from an Office of the Accountant-General unit to a fully functional public sector (FGN) asset management organization.

Takang said:

“Consequently, it was determined in 2021 by the then Minister of Finance, amongst other relevant decisions, that MOFI would adopt a new, value-driven strategic direction in aggregating and managing FGN assets.

Takang added that MOFI would be restructured and repositioned as an active asset management corporation to develop a strategy for creating a National Assets Register that aggregates and profiles all national assets and investments.

He said that the group would also develop and implement policies and regulations that ensure the creation and management of assets from debt-related transactions.

He also said the group would develop and enforce policies and rules that ensure the creation and management of assets from concession-related transactions.

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“It was further determined that in line with global best practices, MOFI would take on an expanded and more active role, not to directly take over and run the corporate entities created around these FG assets but rather to work with its co-promoters and co-shareholders to develop and implement corporate policies and practices that ensure that these assets are operated for maximum value.

“This revitalised strategy is underpinned by a three-point agenda of establishing and confirming state ownership, professionalising state ownership and strategic resource mobilisation and investment. The process of reform and restructuring leads to the consolidation and assumption of the ownership rights of MOFI’s shareholdings across various asset classes” the MOFI MD explained.

According to Takang, MOFI’s resumption of its management rights of the FG’s 40 per cent shareholding in the eleven electricity distribution companies and the various equity stakes in related energy sector companies is an essential element of this consolidation.

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He added that the development would drive three operating efficiencies and best corporate governance practices and maximize the value of these electricity assets, aligning with President Bola Ahmed Tinubu’s economic growth agenda.

NERC dissolves Nigerian DisCo's board

Legit.ng earlier reported that few days after the Nigerian Electricity Regulatory Commission (NERC) threatened to sanction DisCos over electricity load rejection, the commission dissolved the board of Kaduna DisCo over N110 billion debt.

NERC said the dissolution came following the company's inability to meet its obligations, which amounted to N182.16 billion in the last four years.

The amount included N51.9 billion market remittance shortfall, N25 billion minimum capital expenditure requirements, and N11.46 billion operations expenses requirement for 2023.

Source: Legit.ng