FG To Banks: Sell Shares In Six Electricity Companies

The Ministry of Power has issued a 12-month ultimatum to banks holding majority stakes in six electricity distribution companies to divest their shares.

The banks have been mandated to find serious investors to sell their 60 per cent equity in the Abuja, Kano, Kaduna, Benin, Ibadan and Port Harcourt DisCos.

This was disclosed by the Minister of Power, Abubakar Aliyu, at the 11th edition of the ‘PMB Administration Scorecard Series (2015-2023)’ organised by the Federal Ministry of Information and Culture.

According to him, the government was monitoring the operations and divestment process of the six DisCos to ensure compliance with the core objectives of restructuring the power firms.

Aliyu explained that the government sacked the previous core investors to make them more responsible, in furtherance of its commitment to put the DisCos on their feet.

He explained that the restructuring of the six Discos included the sacking of the previous core investors due to poor performance and the composition of a new board and management to run them as well as allowed the lenders to take over.

“Either banks or the Asset Management Corporation of Nigeria (AMCON) hold the franchise. So the banks have taken over 60 per cent ownership. We have allowed the banks, the Bureau of Public Enterprises (BPE) and the Central Bank of Nigeria (CBN) to take control.

“The lenders provided the chairmanship of the Discos. The BPE provided part of the management, including the managing directors and then the CBN provided the chief financial officer (CFO) and the auditor. So this is the position we are now with the six discos. They are Abuja, Kano, Kaduna, Benin, Ibadan and Port Harcourt. One may ask why only six? What about the rest?,” he said.

The minister further noted that only the two Discos in Lagos and one in Enugu, out of the 11 Discos were performing well, while Jos Disco was re-concessioned in 2022 and Yola was re-concessioned in 2021.

On the Nigeria Distribution Sector Recovery Programme (DISREP), he said it is a loan of $500 million which initially we refused to take for the Discos because of their situation. We don’t trust the way things have been handled.

“So, the loan has been there with the World Bank since last year but we did not take it until when we were able to restructure,” he added.

“Even now that Mr. President has approved through the Federal Executive Council, the DISREP, there are some conditions tied to them so that we can remove the risks attached to it. This is the situation.

“I hope and it is not going to be forever because banks are not in the business of providing electricity. So we have given them six months to one year to find someone serious to sell their 60 per cent equity to those in the business of electricity. This is the situation now and we are monitoring,” Aliyu added.