FG Orders Sale Of DisCos Managed By Banks, AMCON Within 3 Months

The federal government has ordered the resale of electricity Distribution Companies (DisCos) now under the management of banks and the Asset Management Company (AMCON) within three months to reputable power operators.

LEADERSHIP reports that five DisCos are currently under the management of AMCON and bank lenders. Abuja Electricity Distribution Company (AEDC) is currently under the management of the United Bank of Africa (UBA), Fidelity Bank and Afreximbank had in 2022 taken over the management of Benin Electricity Distribution Company, Kaduna Electricity Distribution Company and Kano Electricity Distribution Company, while Ibadan Electricity Distribution Company is under AMCON management.

The minister of power, Adebayo Adelabu, who revealed this yesterday to members of the Senate Committee on Power during an oversight visit to the ministry in Abuja, explained that the energy distribution assets are technical in nature and, as such, they should be under the management of technical experts.

He informed the committee that tough decisions on the DisCos had become necessary because the entire Nigerian Electricity Supply Industry (NESI) fails when they do not perform.
According to him, the ministry will prevail on the Nigerian Electricity Regulatory Commission (NERC) to revoke underperforming licences and also change the management board of the DisCos if it becomes necessary.

“We have put pressure on NERC to make sure that they raise the bar of regulatory activities on electricity distribution companies (DisCos). If they have to withdraw licences for non-performance, why not? If they have to change the board and management, why not?”

“All the DisCos that are still under AMCON and bank lenders, within the next three months they must be sold to technical power operators with good reputation in utility management. We can no longer afford AMCON or the banks to run our DisCos. This is a technical industry and must be run by technical experts,” Adelabu said.

He further disclosed that the federal government would be unbundling the DisCos along state lines to improve their efficiency.

“Some of the DisCos are too big for efficiency and effectiveness, so each state government should know the DisCo for their states,” he said.

Adelabu also revealed that the federal government had mobilised a company, Messr Ziglagsis Network Ltd, and Unistar International with $200 million to supply three million meters in 2003 and these were never supplied to date.

“If you held N32billion for these years, where is the interest”, he asked.
According to him, President Ahmed Tinubu had directed that the contract be revoked.
He said the government will bridge the current eight million metering gap in the next four to five years.

The minister noted that the funding is coming from a seed capital of N100 billion and N75 billion.
He added that the Nigerian Sovereign Investment Authority (NISA) is coming to the aid of the ministry with the fund.

He described the power sector crisis as historical, stressing that it had defied all solutions.
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.

Chairman, Senate Committee on Power, Senator Enyinnaya Abaribe, said the committee was on an oversight function and familiarisation tour to the Federal Ministry of Power in Abuja.
Commenting on the issue of the new Band A tariff increase, Abaribe said the Senate had summoned the minister of power, Adebayo Adelabu, and the top echelon of the National Electricity Regulatory Commission (NERC) to appear before it for an investigative hearing on the recent electricity tariff hike in the country.

“The Senate has already authorised an investigative hearing scheduled for the 29th of April, 2024. The major agencies of government will answer questions.

“We have summoned the NERC. We will give them an opportunity to speak about the electricity tariff hike. The minister of power is, of course, expected to appear too.”
Abaribe, who was in company of many senators in the committee, including Senator Dajuma Goje (Gombe Central), Simon Lalong (APC, Plateau South), Osita Izunaso (Imo West), among others, expressed worry over the poor power situation in the country, saying the time to act is now.

Speaking during the opening session, the minister enumerated the challenges affecting the power sector to include poor funding, vandalisation, issue of right of ways, lack of gas, among many others, and asked the committee to support the power ministry to achieve its mandate.

Responding to the decision to resell the DisCos, a member of the committee, Senator Isah Jibrin, alleged that some of the operators had 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.

Besides, Senator Danjuma Goje who is a member of the committee and a former Minister of Power, told Adelabu that nothing has changed in the sector.

Senator Lalong, who responded to the issue of the company that abandoned a project after collecting $200million since 2021, noted that people must be punished for their crimes to serve as a deterrent to others.

On his part, Senator Osita Ozunaso called for the cancellation of the DisCos licences.

“DisCos are the problem,” he declared.

Senator Neda Imasuen advised that since the present managers of the power sector have failed over the years, the government should hand them over to new ones, even foreigners.