The Federal Government has initiated a plan to overhaul underperforming electricity Distribution Companies (DisCos), even as a legal storm brews over the controversial takeover of Ibadan Electricity Distribution Company (IBEDC).
With most of the DisCos struggling with capital-based and poor infrastructure, the National Assembly, as well as Managing Director of Azura Power West Africa, Edu Okeke, insisted that the country’s 11 distribution companies need at least $5.5 billion capital, with each having at least $500 million capital before being allowed to remain in operation.
Minister of Power, Adebayo Adelabu, yesterday, in Abuja, said the government was working with the Japanese International Cooperation Agency (JICA) for a comprehensive reform blueprint.
Amid the Ibadan DisCo crisis, Adelabu said two other DisCos, one in the northern region where Kaduna DisCo recorded the worst aggregate technical, commercial and collection (ATC&C) loss of 60.65 in the last part of 2024, and one in the South, where Ibadan DisCo is embattled, are being targeted. The pilot scheme, beginning between May and August this year, is, according to the minister, not optional.
“We will use our regulatory authority to restructure underperforming DisCos and compel compliance where necessary. Nigerians have endured poor service for too long,” the minister stated. The JICA’s proposal advocates internal reforms driven by external expertise, stronger leadership, and federal oversight, aimed at transforming the DisCos from within. JICA’s Power Sector Policy Adviser to Nigeria, Takeshi Kikukawa, reiterated the need for a holistic approach.
“The aim is to deliver immediate results in the pilot zones while building a foundation for sustainable, nationwide improvement,” he said. The push to reform coincides with controversy over the proposed $62 million sale of AMCON’s 60 per cent equity in IBEDC, one of the country’s largest DisCos. A civil society organisation, the African Initiative Against Abuse of Public Trust, has filed a suit at the Federal High Court seeking to stop the deal, alleging gross undervaluation and lack of transparency.
The group argued that the proposed transaction, valued at around N100 billion ($62 million), is “secretive, illegal, and against the public interest.”
According to court filings, the stake was originally sold to Integrated Energy Distribution and Marketing Company in 2013 for $169 million.
AMCON acquired the stake via receivership after the original owners defaulted on a loan, which had been acquired by AMCON from Polaris Bank (formerly Skye Bank). Led by legal counsel, Chibuzor C. Ezike and a team of seven other lawyers, the group argued that AMCON holds the equity in public trust and lacks the legal or moral authority to dispose of it below the original valuation without a transparent and competitive bidding process.
The group further seeks a restraining order preventing BPE and NERC from approving or validating the transaction in its current form. IBEDC’s spokesperson, Angela Olanrewaju, confirmed the planned sale and acknowledged the pending litigation, but redirected further inquiries to AMCON and BPE.
Similarly, NERC confirmed awareness of the matter but declined comment, with a source within the commission questioning the legal challenge. Repeated efforts to contact AMCON’s spokesperson, Jude Nwauzor, and BPE’s Director of Energy, Amaechi Aloke, were unsuccessful, as their calls and messages were rebuffed.
THE GUARDIAN
