As the federal government plans to sell the electricity distribution companies (DisCos) under the management of banks and the Asset Management Company of Nigeria (AMCON), stakeholders have stressed the need to prioritise unbundling the DisCos along state lines. Also, the Federal Government must prioritise the injection of foreign direct investment (FDI) in the sale of DisCos currently run by AMCON and the banks. The Minister of Power, Adebayo Adelabu, announced on Monday that the DisCos in the hands of banks and AMCON should be sold within the next three months to investors with the technical and financial capacity to manage them and make them function effectively and efficiently. He explained that energy distribution assets are technical and require sound technical know-how to manage, which banks and AMCON lack. The debt-ridden DisCos have continued to struggle for survival due to the chronic liquidity crisis in the Nigerian Electricity Supply Industry (NESI), which has become worse post-privatisation. Currently, four DisCos are under the management of banks and one under AMCON.
Abuja Electricity Distribution Company (Abuja DisCo) is under the management of the United Bank of Africa (UBA), while Fidelity Bank manages Benin Electricity Distribution Company (Benin DisCo), Kaduna Electricity Distribution Company (Kaduna DisCo), and Kano Electricity Distribution Company (Kano DisCo). The Ibadan Electricity Distribution Company is under AMCON management. The DisCos were taken over by banks and AMCON due to their inability to repay loans, however, the Federal Government believes that the DisCos should be managed by professionals to ensure efficiency and effectiveness.
This decision was made due to the poor performance of the DisCos, which has been a significant setback to the NESI. The government is also planning to unbundle the DisCos along state lines and restructure them for better management and efficiency. The electricity distribution companies (DisCos) under banks and AMCON owe significant amounts in debt, with figures varying across different sources. The Kaduna Electricity Distribution Company (Kaduna Electric) alone owes $130 million while, collectively, the 11 distribution companies owe the Nigerian government N1.4 trillion.
