The Nigerian government has initiated the process of restructuring the eleven electricity distribution companies (DisCos) across the nation. This development was announced by Nigeria’s Minister of Power, Adebayo Adelabu, during a meeting with the Senate Committee on Power held at the Ministry of Power and the Transmission Company of Nigeria (TCN) in Abuja on Monday.
As part of the restructuring, DisCos that have been taken over by banks and the Assets Management Corporation (AMCON) are slated for sale. Currently, five distribution companies are under bank and AMCON management due to their failure to repay loans. Specifically, the Abuja DisCo is managed by the United Bank of Africa (UBA), while Fidelity Bank oversees the Benin, Kaduna, and Kano DisCos. The Ibadan DisCo falls under AMCON's management.
The federal government privatized 11 electricity distribution companies (DISCOs) and six generating companies (GENCOs) in November 2013, while retaining full ownership of the Transmission Company of Nigeria (TCN).
Minister Adelabu explained to the Senate Committee on Power that the restructuring aims to improve efficiency and effectiveness by dividing DisCos along state lines. He emphasized that some DisCos are too large to operate efficiently, citing the example of the Ibadan DisCo covering seven states. Adelabu also stressed the need for both federal and state governments to play active roles in the operation and management of DisCos, considering that the government still owns 40% of these firms.
Additionally, plans are in place to franchise unserved communities under the DisCos. Adelabu expressed determination to enforce regulations and revoke licenses for underperformance, urging the Nigerian Electricity Regulatory Commission (NERC) to take necessary actions against non-performing DisCos.
Furthermore, Adelabu emphasized the urgency of selling DisCos currently under AMCON and bank management to technically proficient operators within the next three months. He asserted that the technical nature of the industry requires expertise in utility management, highlighting the need to disengage AMCON and banks from running DisCos.
