The Federal Government has declared the unbundling of power distribution companies (Discos) along state lines. This decision, announced on Monday, seeks to address the challenges posed by the large sizes of these companies, which have often led to inefficiencies.
While reaffirming that the privatisation of the Discos will not be reversed, the government emphasised the necessity of breaking them into more manageable structures along state lines to facilitate better service delivery. The move comes amidst concerns over the performance of the Discos, with some currently under the management of banks and the Assets Management Corporation of Nigeria (AMCON) due to loan repayment challenges.
At present, four Discos are under the management of financial institutions, including the Abuja Electricity Distribution Company, managed by the United Bank of Africa (UBA), and the Benin, Kaduna, and Kano Electricity Distribution Companies, managed by Fidelity Bank. Additionally, the Ibadan Electricity Distribution Company is under AMCON’s management.
The Minister of Power, Adebayo Adelabu, revealed the government’s plans during a meeting with the Senate Committee on Power. He highlighted the need for a restructuring of the power distribution landscape, citing the over 100 incomplete projects of the Transmission Company of Nigeria dating back to 2001.
Adelabu emphasised the government’s commitment to addressing the deficiencies in the power sector, including the metering gap, which has persisted despite past initiatives. He disclosed plans to close the metering gap through the acquisition and distribution of two million metres annually over the next four to five years, supported by a Presidential Metering Council.
Furthermore, the government aims to achieve a power generation capacity of 6,000MW by the end of the year, with ongoing discussions with investors for the construction of 3,000MW solar power projects across various states.
Adelabu underscored the importance of addressing both transmission capacity limitations and payment challenges faced by Discos to realise Nigeria’s power generation potential.
The Senate Committee on Power has also authorised an investigative hearing on electricity tariff hikes, scheduled for April 29, 2024, highlighting ongoing scrutiny of issues within the power sector.
The government’s decision to restructure the power distribution landscape reflects a concerted effort to improve service delivery and address longstanding challenges in Nigeria’s power sector.
