The federal government formally privatized the six successor power-producing companies and 11 distribution firms that were unbundled from the previous Power Holding Company of Nigeria.
The key investors financed the majority of their purchases using debt, with a large portion of the funding coming from local banks. On Tuesday, the issue afflicting Nigeria’s power industry appeared to be getting worse every year despite efforts by the Federal Government and the private sector to handle it.
From power generation through the transmission to distribution, as well as in other sectors of the company like the regulation of the sector, there have been a number of problems. Concerns have been raised by stakeholders regarding the viability of privatizing the distribution and generating sectors of the business.
They said that recent acquisitions or reacquisitions of several power distribution businesses by investors like as the Asset Management Corporation of Nigeria, a Deposit Money Bank, and other parties demonstrated that there was a problem with the Discos.
The managing director of three discos for around 13 years in the South-East and South-West, Chris Akamnonu, said, “The issue is more nuanced than the average person perceives. The honest fact is that the entire experiment may not be producing the anticipated outcomes.
It was reported in July of this year that five energy distribution firms, or DISCOs, had their affairs taken over by the Federal Government, Fidelity Bank, and AMCON due to debts owing to Fidelity Bank.
The affected companies were Kano Electricity Distribution Company, Ibadan Electricity Distribution Company, Benin Electricity Distribution Company, Kaduna Electric, and Port Harcourt Electricity Distribution Company.
The companies had failed to repay loans obtained to pay for assets acquired in the 2013 privatisation exercise. Also, the government, through its BPE, announced that with the takeover of Ibadan Disco by AMCON, the BPE had obtained approval from the Nigerian Electricity Regulatory Commission to appoint an interim managing director for the distressed power firm.
