The Nigerian government has kicked off a major overhaul of the country’s troubled power distribution sector, particularly targeting the inefficient electricity distribution companies (Discos).
In an appearance before the Senate Committee on Power, the Minister of Power, Adebayo Adelabu, announced that the 11 Discos will be unbundled and restructured along state lines to improve efficiency and accountability.
Adelabu stated that some of the existing Discos cover too many states to be effectively managed, citing the Ibadan Disco which oversees seven states as an example. By aligning the Discos with individual states, it will be easier for state governments to exercise oversight.
Franchising Underserved Areas The minister also revealed plans to franchise off unserved communities currently under the Discos to smaller, dedicated operators willing to invest in those areas. This comes after the Oyo State government indicated its intent to assert its ownership rights in the Ibadan Disco.
Forced Sale of Failed Discos In a significant move, Adelabu ordered that the four Discos currently under bank/AMCON management due to insolvency must be sold off to technically competent utility operators within three months.
The affected Discos are Abuja (UBA), Benin, Kaduna, and Kano (Fidelity Bank), and Ibadan (AMCON). The government blamed the original investors for lacking technical expertise and capital to properly run the utilities.
Metering Gap and Uncompleted Projects Adelabu lamented the failure of a 2003 $200 million contract to provide 3 million meters, revealing that over 8 million customers currently lack meters across Nigeria.
He also disclosed that over 100 transmission projects initiated by the Transmission Company of Nigeria since 2001 remain uncompleted after over two decades.
The Senate committee excoriated the Discos for their dismal performance since taking over the privatized power assets in 2013, calling for their overhaul.
With the government setting a target to reach 6,000MW of generation by year-end and clearing outstanding debts to gas and Genco suppliers, the restructuring aims to finally catalyze improvement in Nigeria’s moribund power distribution sector after years of underinvestment and mismanagement.
Reference
FG Begins Unbundling Of 11 DisCos, Orders Sale Of Four published in Channels