In a bid to enhance efficiency and performance within Nigeria’s power sector, the Federal Government has commenced the unbundling process for the 11 electricity distribution companies (DisCos), restructuring them along state lines.
The Minister of Power, Adebayo Adelabu, disclosed this during a visit by the Senate Committee on Power, led by Senator Eyinnaya Abaribe, to the ministry in Abuja on Monday, April 22, 2024.
Adelabu emphasized that while the privatization of the DisCos would not be reversed, breaking them into more efficient structures along state lines would enable them to fulfil their mandates effectively.
He highlighted the impracticality of some DisCos covering multiple states, leading to inefficiencies in service delivery.
The minister outlined the government’s plans to involve both federal and state governments in the operation and management of the DisCos, considering that the government still retains 40 per cent ownership of these firms.
Additionally, he mentioned the intention to franchise unserved communities under the DisCos.
Furthermore, Adelabu announced the government’s decision to sell off the five DisCos currently managed by banks and the Assets Management Corporation of Nigeria (AMCON) to technical power operators within the next three months.
”These DisCos, including Abuja Electricity Distribution Company, Benin Electricity Distribution Company, Kaduna Electricity Distribution Company, Kano Electricity Distribution Company, and Ibadan Electricity Distribution Company, have been under new management due to their inability to repay loans to financial institutions,” he stated.
The minister emphasized the need for decisive action on underperforming DisCos, stating that the Nigerian Electricity Supply Industry (NESI) suffers when it fails to meet expectations.
He hinted at potential measures to address non-performance, such as revoking licenses and changing management boards.
Adelabu stressed the importance of having technical experts manage DisCos, highlighting the unsuitability of AMCON and banks to run these entities.
He also reiterated the technical nature of the industry and the necessity for competent operators to ensure effective service delivery.
Adelabu recently expressed concern about Nigeria’s suboptimal performance of all 10 Independent Power Plants (IPPs), revealing that they operate at less than 15 per cent capacity.
He made this known during the electricity and energy access session at the Nigeria International Energy Summit (NIES 2024) in Abuja.
The minister also lamented that the inadequate power supply was hindering citizens from enjoying a good quality of life.
