Power: FG Begins Unbundling, Sales Of Discos

Minister of Power, Adebayo Adelabu, made this announcement while meeting with the Senate Committee on Power.

By Musa Ibrahim

The Federal Government has announced the restructuring of power distribution companies in Nigeria along state lines, citing their large sizes as a cause of inefficiency and ineffectiveness.

Minister of Power, Adebayo Adelabu, made this announcement while meeting with the Senate Committee on Power, led by Chairman Senator Eyinnaya Abaribe.

Adelabu mentioned that the restructuring initiated by the Tinubu-led administration aims to improve the efficiency of Nigeria’s 11 power distribution companies.

He clarified that while the privatization of the firms will remain unchanged, the Discos will be divided into more efficient entities. Additionally, the government has ordered the sale of Discos that have been taken over by banks and the Assets Management Corporation of Nigeria due to their inability to repay loans.

Notably, Abuja Electricity Distribution Company (AEDC), Benin Electricity Distribution Company (BEDC), Kaduna Electricity Distribution Company (KEDC), and Kano Electricity Distribution Company are currently managed by banks and AMCON.

AEDC is under the management of UBA, while BEDC, KEDC, and Kano Electricity Distribution Company are managed by Fidelity Bank. AMCON oversees the Ibadan Electricity Distribution Company.

The Senate Committee on Power criticized the distribution companies for failing to meet Nigerians’ expectations since taking over the privatized assets more than 10 years ago. Furthermore, Minister Adelabu revealed that over 100 projects of the Transmission Company of Nigeria have been incomplete since 2001, spanning about 23 years.

“We are unbundling the Discos along state lines. Some of the Discos are too big for efficiency. They are too big for effectiveness. Ibadan Disco covers seven states. It is practically impossible for them to be efficient,” he said.

“So we are rearranging and restructuring the Discos along state lines so that each state government will know the responsible Disco for their states.

“Also, the federal and state governments should start exercising their rights in the operation and management of the Discos because we still own 40 per cent in the firms.

“But we have left it for the private sector operators for too long and they have messed it up. So the government must come back to take over its own right in the Discos. We are also planning to franchise the unserved communities under the Discos.”

The minister went ahead to state that “we will start seeing regulations about franchising. The fact you are Eko Disco doesn’t mean that you cannot have smaller Discos that are ready to invest in your unserved communities. So we are looking at franchising.”


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