FG Lists Four Electricity Distribution Company Companies For Sale, Moves to Unbundle 11 Others
- The Nigerian government has declared an interest in unbundling large electricity distribution companies
- The Minister of Power, Adebayo Adelabu, said the government will also sell power companies under AMCON and bank management
- The minister revealed that about four electricity distribution firms are under AMCON and banks and would sold to new investors
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Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment, and the economy for over a decade.
The Nigerian government declared on Monday, April 22, 2024, that electricity distribution companies are currently being unbundled along state lines due to their vast sizes, which causes inefficiency and ineffectiveness.
The government noted that the privatization of the companies would remain. Still, it said that the DisCos would be broken down into more efficient structures along state lines to deliver on their mandates.
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FG to sell four DisCos in Nigeria
The development comes amid a directive by the Nigerian government to sell DisCos under the management of banks and the Asset Management Corporation of Nigeria (AMCON) from their original owners.
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There are currently four DisCos under banks and AMCON management.
According to reports, the DisCos include Abuja Electricity Distribution Company, managed by the United Bank for Africa. Fidelity Bank manages Benin, Kaduna, and Kano DisCos, and AMCON manages the Ibadan DisCo.
The four Discos are under new management due to their inability to repay loans to the various financial institutions.
Leadership reported that the Nigerian government stated that those who bought the power companies when they were officially privatized in November 2013 need more expertise and financial muscle to run them.
The development comes as the Senate Committee on Power criticized the power companies over their inefficiency since they were acquired over 10 years ago and called for their overhaul.
The Minister of Power, Adebayo Adelabu, said the Nigerian government has begun restructuring the 11 DisCos.
Legit.ng reported earlier that Adebayo said that over 100 Transmission Company of Nigeria (TCN) projects had been completed since 2001.
FG to break down 11 DisCos into smaller units
Adelabu said:
“We are unbundling the Discos along state lines. Some of the Discos are too big for efficiency and effectiveness. Ibadan Disco covers seven states, making it practically impossible for them to be efficient.
The minister hinted at franchising some DisCos, stating that more prominent power companies would be broken into smaller units to serve unserved communities.
The minister said the Oyo State government has indicated an interest in exercising its rights in Ibadan DisCo.
Adebayo stated that the Nigerian Electricity Regulatory Commission has been notified of the need to sanction DisCos that fail to perform and may even revoke their licenses.
FG gives new conditions for achieving stable power
Legit.ng earlier reported that Nigerian electricity companies need new investors to revitalize the industry. They need an estimated N2 trillion ($2.5 billion) in capital.
In an interview, Olu Verheijen, an adviser to President Bola Tinubu on energy, said the companies must be more leveraged and capitalized.
Due to poor pricing, inconsistent revenue collection, and a decaying national system, most people in the most populous country in Africa now generate their electricity with loud generators.
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Source: Legit.ng
