The partial privatisation of the Nigerian power sector in 2013 led to the development of six Generation Companies (GenCos), eleven Distribution Companies (DisCos) and the government-run Transmission Company of Nigeria (TCN). Although the unbundling aimed to create a competitive electricity market for the Nigerian Electricity Supply Industry (NESI), that is not the case today. The current state of the NESI is DisCos being restructured for unpaid loans.
The federal government recently announced that five (5) distribution companies would be reformed due to the inability to repay loans borrowed during 2013 unbundling. The affected DisCos are Benin Electricity Distribution Company (BEDC), Ibadan Electricity Distribution Company (IBEDC), Port Harcourt Electricity Distribution Company (PHEDC), Kaduna Electric and Kano Electricity Distribution Company (KEDCO).
The announcement was made by the Executive Chairman of the Nigeria Electricity Regulatory Commission (NERC), Sanusi Garba, and the Director-General of the Bureau of Public Enterprises (BPE), Alex Okoh. They both stated that the move to reform the DisCos was necessary after Fidelity Bank activated the call on the collateralised shares of BEDC, Kaduna Electric and KEDCO. According to the statement, the bank made the activation due to the DisCos’ inabilities to repay loans used in acquiring assets for privatisation.
This current state of the NESI involving DisCos being restructured for unpaid loans has a lot of intricacies. NERC and BPE have approved the list of new board members for the DisCos provided by the bank.
- BEDC: KC Akuma (Chairman), Adeola Ijose (Member), Charles Onwera (Member).
- Kaduna Electric: Abbas Jega (Chairman), Ameenu Abubakar (Member), Marlene Ngoyi (Member).
- KEDCO: Hasan Tukur (Chairman), Nelson Ahaneku (Member), Engr. Rabiu Suleiman (Member).
- IBEDC: Ahmed Kuru (Chairman), Eberechukwu Uneze (Member), Aminu Ismail (Member).
However, to protect the government’s 40 per cent (%) interest in the DisCos, the BPE has also nominated Yomi Adeyemi (BEDC), Umar Abdullahi (Kaduna Electric) and Bashir Gwandu (KEDCO) and Oluwaseyi Akinwale (IBEDC). In addition, NERC and the BPE have appointed managing directors to ensure the process of business continuity for the DisCos: Henry Ajagbawa (BEDC), Yusuf Usman Yahaya (Kaduna Electric) and Ahmad Dangana (KEDCO). According to the statement:
Lastly, we are restructuring the Management and Board of Port Harcourt DISCO to forestall the imminent insolvency of the entity. As a condition for support to the entity to meet its market obligations, Iboroma Akpana will take over as the Chairman of the Board. Emmanuel Okotete, Eyo Ekpo, Ismaila Shuaibu and the DG of BPE will form the interim Board. Mr Benson Uwheru will take over as the Managing Director of PHEDC as part of the changes.
The current state of the NESI involving DisCos being restructured for unpaid loans was not the envisaged vision post-privatisation. As a result, experts have urged for the power sector’s privatisation to be reversed. In a statement, Kunle Olubiyo, President of Nigeria Consumer Protection Network, said:
It is either the Federal Government do a mid-term review of the privatisation process or total reversal of the privatisation. We did not get it right…
Mr Olubiyo added that the government has spent more on the sector post-privatisation than on the defunct National Electric Power Authority (NEPA) and Power Holding Company of Nigeria (PHCN). Privatising the power sector was supposed to yield increased generation and efficiency and attract private investment; however, DisCos being restructured for unpaid debts proves otherwise.
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