FG sets to take over electricity distribution from "failed" investors

There are strong indications that the Federal Government may repossess the 10 electricity distribution companies ( DISCOS) for their inability to improve customer service and meet operational costs as a direct consequence of their inability to raise capital.

The urgent need to recapitalise the failed privatised distribution companies is being done on the backdrop of the scheduled final performance review of the private firms that bought into the distribution companies carved out from the defunct Power Holding Company of Nigeria.

If the decision is finally taken, the repossession of asset of the DISCOS from the investors is likely to cost the Federal Government a whopping $2.4bn ( N 736bn)

Recall that defunct Power Holding Company of Nigeria ( PHCN) was unbundled in November 1, 2013 and completely privatised to the Electricity Distribution Companies and Generation Companies, by the administration of Former President, Dr. Goodluck Jonathan.

The Transmission Company of Nigeria, is still fully owned and operated by the government.

Establishing this claim , the Ministry of Power, Works and Housing in a document discreetly released to the press, described the co- owners of the distribution companies as ‘failed investors.

The Power Ministry, in its new ‘ Power Sector Policy Directives and Timelines, ’has affirmed commitment to recapitalise the Discos, based on their inability to improve customer service and meet operational costs as a direct consequence of their inability to raise capital.

The Bureau of Public Enterprises said in October 2018 that the five- year performance agreement with the core investors in the Discos , with the exception of Kaduna Disco, became effective on January 1, 2015 and the fifth anniversary for final performance review would therefore be December.

The review will determine whether the core investors have met some targets specified in the agreements signed with the companies

Despite increase in the generation capacity of the 27 power stations,17 of them have been forced to shut due to the inability of Discos to evacuate power generated

Total power generation dropped to 3, 264. 4 megawatts as of 6am on Monday , August 12 from 3, 580. 5MW on Sunday. It stood at 2, 842. 1MW as of 6am last Thursday.

Five and a half years after privatisation, the 11 Discos have been described as ‘technically insolvent .

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