FG is committed to optimal performance in the power supply and explains the acquisition of five DisCos

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July 09 (THEWILL) – The federal government says restructuring of five of the country’s 11 electricity distribution companies (DisCos) is inevitable to usher in better performance and stability in electricity supply.

The companies concerned are the distribution companies of Port Harcourt, Kano, Kaduna, Ibadan and Benin.

Private companies have struggled to provide electricity since the government ceded control in 2013, although the government retains a 40% stake in the companies through the Bureau of Public Enterprises (BPE).

In a statement on Friday, the BPE explained that the restructuring of the five DisCos through the collateralization of their shares, was a contractual and commercial intervention between the companies’ main investors and their lenders, adding that the BPE’s involvement was to protect the 40 percent federal government involvement in Discos.

The statement, personally signed by its chief executive, Alex Okoh, says the federal government has appointed acting chief executives for three of the five nightclubs involved, including distribution companies in Benin, Kano and Kaduna.

The statement read as follows: “The Bureau of Public Enterprises (BPE) considers it imperative to clarify the insinuations and statements made by some of the electricity distribution companies (DISCO), which have been restructured following the actions collateralized from some of the DISCos.

“As we have previously informed the public through various publications in print and electronic media, BPE, which led the sale of the power companies and the Nigerian Electricity Regulatory Commission (NERC), which is the industry regulator, were advised by Fidelity Bank.Plc on Tuesday, July 5, 2022, that a call on collateralized shares of Core Investors Kano, Benin and Kaduna DISCOs had been activated by the lenders. lenders include AFREXIM Bank, Keystone Bank, Stanbic IBTC, as well as Fidelity Bank.

“It is important to note that the action is a contractual and commercial intervention and is between the main investors of these DISCOs and the lenders. BPE’s involvement is to protect the federal state’s 40% stake in DISCOs.

“It is on this basis that new councils reflecting this action have been constituted as follows:

“Kano DISCO: Hasan Tukur (president), Nelson Ahaneku (member), engineer. Rabiu Suleiman (member); DISCO Benin: KC Akuma (President), Adeola Ijose (Member), Charles Onwera (Member); Kaduna DISCO: Abbas Jega (Chair), Ameenu Abubakar (Member), Marlene Ngoyi (Member)

“BPE has appointed Bashir Gwandu (Kano DISCO), Yomi Adeyemi (Benin DISCO) and Umar Abdullahi (Kaduna DISCO), as independent directors to represent the government’s 40% stake in the aforementioned DISCOs, during this transition .

“As the agency representing the interests of the Federal Government in DISCOs, BPE has already engaged with the Central Bank of Nigeria (as regulator of the banking sector) for an orderly transition and to ensure that lenders do not hold the guaranteed shares of the Core Investors in perpetuity, given that they do not have the technical capacity and have not been duly authorized to operate an electricity distribution company. assured BPE and NERC that they would fully participate in all ongoing market initiatives aimed at improving the sector (eg the National Mass Metering Program).

“It is envisaged that the majority stake in these DISCOs will be sold to qualified private sector investors with the technical and financial capacity required to recapitalize and effectively manage these entities.

“On an interim basis, NERC and BPE met on an emergency basis and activated the business continuity process and appointed interim CEOs in the relevant DISCOs as follows:

“Kano DISCO – Ahmad Dangana; DISCO Benin – Henry Ajagbawa; Kaduna DISCO – Yusuf Usman Yahaya

“It bears repeating that some of the publications of the major investors of these DISCOs have been quite dishonest. Beyond the financial issues I have just mentioned, the DISCOs concerned are the least efficient.

“Ibadan is currently managed by a so-called Receiver Manager as sole administrator. The Receiver Manager has absolutely no capacity to manage a public service and has not been authorized by the Regulator as the manager of a DISCO.

“Ibadan is the worst performing DISCO according to the performance assessment review conducted in December 2021. Ibadan DISCO has actually regressed in terms of critical performance metrics as foreseen in the performance agreement signed with office. In fact, DISCO under the lead investor, Integrated Energy Distribution and Marketing Limited (IEDM), performed less well than before its privatization.

“The performances of DISCO Benin, Port Harcourt, Kano and Kaduna were also catastrophic.

“It is necessary to state categorically that the poor performance of these DISCOs represents a clear and present threat to the electricity sector as a whole and that no government and responsible shareholder would sit idly by and allow this situation to persist.

“BPE wishes to assure Nigerians that despite the challenges in the sector, the government remains fully committed to ensuring peak performance in the power sector and will not hesitate to take the decisive steps necessary to achieve it.”

Alan A. Seibert