Power: Nigerian govt begins unbundling, sales of Discos

The Federal Government has announced the unbundling of power distribution companies in Nigeria along state lines.

This is due to their large sizes which often result in inefficiency and ineffectiveness.

The Minister of Power, Adebayo Adelabu stated this on Monday when he received the Senate Committee on Power, led by their Chairman, Senator Eyinnaya Abaribe.

Adelabu said the Tinubu-led administration had commenced the restructuring of Nigeria’s 11 power distribution companies.

According to him, the privatisation of the firms would not be reversed but stressed that the Discos would be broken into more efficient structures

The Nigerian government has also ordered the sale of Discos that have been taken over by banks and the Assets Management Corporation of Nigeria from its original investors/owners.

The likes of Abuja Electricity Distribution Company, AEDC; Benin Electricity Distribution Company, BEDC; Kaduna Electricity Distribution Company, KEDC; and Kano Electricity Distribution Company are all being managed by banks and AMCON.

AEDC is under the management of UBA, and Fidelity Bank manages BEDC, KEDC and Kano Electricity Distribution Company.

AMCON is in charge of the Ibadan Electricity Distribution Company.

This is due to their inability to repay their loans to the financial institutions.

The Senate Committee on Power said the distribution companies have failed to meet the expectations of Nigerians since they took over the privatised assets over 10 years ago.

The Minister further revealed that over 100 projects of the Transmission Company of Nigeria have not been completed since 2001, a period of 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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