FG to sell off DisCos managed by banks, AMCON to tech power operators

Nigeria’s Government has disclosed plans to sell off the five electricity Distribution Companies (DisCos) managed by some banks and Asset Management Company (AMCON) to technical power operators, by July 2024.

Minister of power, Adebayo Adelabu disclosed this Monday in Abuja during an oversight visit of the Senate Committee on Power to the ministry.

Recall in 2022 Nigerian government in league with Fidelity Bank and AMCON in a bid to save the companies from insolvency, among other reasons, took over the affairs of Kano Electricity Distribution Company (KEDCO), Ibadan Electricity Distribution Company (IBEDC), Benin Electricity Distribution Company (BEDC), Kaduna Electric, and Port Harcourt Electricity Distribution Company (PHED)

According to the Minister, the decision became necessary due to their continued poor performance, which he said was a setback to the Nigerian Electricity Supply Industry (NESI).

According to him, the ministry will prevail on the Nigerian Electricity Regulatory Commission (NERC) to revoke underperforming licenses and also change the management board of the DisCos if it becomes the solution.

He said, “Lastly, on distribution. Very soon you will see that tough decisions will be taken on the DisCos. They are the last lap of the sector. If they don’t perform, the entire sector is not performing.

“The entire ministry is not performing. We have put pressure on NERC, which is their regulator to make sure they raise the bar on regulation activities. If they have to withdraw licenses for non-performance, why not? If they have to change the board of management, why not?

“And all the DisCos that are still under AMCON and Banks, within the next three months, they must be sold to technical power operators with good reputations in utility management.

“We can no longer afford AMCON to run our DisCos. We can no longer afford the banks to run our DisCos. This is a technical industry and it must be run by technical experts.”

Adelabu blamed issues in the industry on uncompleted projects, urging the committee to approve funds for the completion of over 120 projects that litter across the country.

In his remarks, Enyinnaya Abaribe, Chairman of Senate Committee on power assured that senate would ensure increased budgetary allocation to the sector, as this would help in resolving most challenges in the sector.

He said, “our biggest concern is the need for improved funding, so I think that we have to take it back to the Senate. For example, in this year’s 2024, budget, the TCN got just N2 billion and the rest of their spending was supposed to be from the internally generated revenue. Now, what is their internally generated revenue? It comes from the part that is paid to them for transmitting power.

“So when the grid collapses then they don’t transmit, then they don’t get any money. So that means that their funding to is not steady

Speaking further, Abaribe disclosed that the Senate has resolved to investigate the recent hike in electricity tariff in the country.

“Senate authorised investigation hearing on tariff increment. So we are going to do an investigative hearing on the 29th of this month. We are going to be taking issues from those who are directly concerned about the tariff hike but that will be on the 29th.

“For today, what we came to do was to do a familiarisation visit and an oversight visit the the ministry and the TCN. Luckily they are in the sesame building so it’s easier for us,” Abaribe said.

In his remarks, Isah Jibrin, a member of the committee, noted that some of the operators have stripped the assets of the DisCos they took over in 2013.

He insisted that the operators of any revoked DisCo must be compelled to fix the assets as they were before handover.