Mr. Adebayo Adelabu, the Minister of Power, has initiated an investigation into the five-year extension of licenses for electricity distribution companies (Discos) that occurred after the expiration of their initial ten-year licenses from 2013 to 2023.
The minister disclosed this during an interaction session with journalists in Abuja, expressing concerns about the extension’s validity.
While acknowledging the challenges of reviewing contracts with Discos, the minister highlighted the government’s efforts to create mini Discos for states across the country to ensure better coverage of consumer needs.
He urged state governments to actively engage and cooperate with Discos within their jurisdictions, emphasizing the importance of a proactive role and investments in the power sector.
Addressing the issue of tariff increases, Minister Adelabu clarified that the government has no plans to implement a tariff hike.
He explained that such a move would not be politically expedient, considering the current challenges, particularly the impact of fluctuating exchange rates on the cost of gas used for power generation.
Furthermore, the minister expressed the view that commercialization, rather than privatization, would be a more suitable approach for the power sector.
He argued that power is a capital-intensive industry, and private actors may lack the necessary resources for effective privatization. The Ministry of Power aims to engage in discussions with Discos to explore strategies for advancing the sector without resorting to tariff increases.
