In Nigeria, the Federal Government has initiated the process of unbundling power distribution companies along state lines due to their large size, which often leads to inefficiency.
During a meeting with the Senate Committee on Power, Minister of Power, Adebayo Adelabu, announced the restructuring of Nigeria’s 11 power distribution companies under the leadership of the Tinubu administration.
While stressing that the privatization of these firms would not be reversed, Adelabu highlighted the government’s focus on breaking down the Discos into more efficient structures.
Furthermore, the Nigerian government has directed the sale of Discos that are currently under the management of banks and the Assets Management Corporation of Nigeria, as they are unable to repay their loans to financial institutions.
Some of the affected Discos include Abuja Electricity Distribution Company (AEDC), Benin Electricity Distribution Company (BEDC), Kaduna Electricity Distribution Company (KEDC), and Kano Electricity Distribution Company, all being managed by banks such as UBA and Fidelity Bank as well as AMCON.
The Senate Committee on Power expressed disappointment in the performance of the distribution companies since taking over the privatized assets over a decade ago.
The Minister also disclosed that over 100 projects by the Transmission Company of Nigeria have remained incomplete for about 23 years, dating back to 2001.
Addressing the restructuring of Discos, Adelabu mentioned, “We are unbundling the Discos along state lines to enhance efficiency and effectiveness. By reorganizing them along state boundaries, each state government will be aligned with their respective Disco responsibilities. Both federal and state governments are encouraged to play an active role in the management of the Discos as the government still maintains a 40% stake in these firms.”
He added, “Our focus is not only on realigning the Discos but on franchising unserved communities under them. There will be regulations put in place for franchising, allowing smaller Discos to invest in these underserved areas, irrespective of their current Disco affiliation.”