FG to unbundle 11 Discos for more efficiency

Onwubuke Melvin
Onwubuke Melvin

Power distribution companies in Nigeria are currently being unbundled for more efficiency the Federal Government declared on Monday.

It stressed that the privatisation of these firms would not be reversed, but pointed out that Discos should be broken into more efficient structures across national boundaries to fulfill their obligations, according to The Punch.

This follows the federal government’s order to sell Discos that have been taken over by banks and the Assets Management Corporation from their original investors/owners.

The Abuja Electricity Distribution Company is under the management of the United Bank of Africa, while Fidelity Bank manages the Benin Electricity Distribution Company, Kaduna Electricity Distribution Company, and Kano Electricity Distribution Company respectively.

AMCON oversees the Ibadan Electricity Distribution Company. These firms were taken over because of their inability to repay their loan obligation.

The government explained that those who bought the DisCos during the privatisation process in November 2013, lacked the financial capacity and expertise to run them.

The Minister of Power, Adebayo Adelabu in his address to the Senate Committee on Power that visited, led by their Chairman, Senator Eyinnaya Abaribe said the federal government had initiated the restructuring of Nigeria’s 11 electricity distribution companies.

Adelabu said, “We are unbundling the Discos along state lines. Some of the Discos are too big for efficiency. They are too big for effectiveness. Ibadan Disco covers seven states. It is practically impossible for them to be efficient.

“So we are rearranging and restructuring the Discos along state lines so that each state government will know the responsible Disco for their states. Also, the federal and state governments should start exercising their rights in the operation and management of the Discos because we still own 40 per cent of the firms.

“But we have left it for the private sector operators for too long and they have messed it up. So the government must come back to take over its right in the Discos. We are also planning to franchise the unserved communities under the Discos.”

In addition, the Minister said “We will start seeing regulations about franchising. The fact you are Eko Disco doesn’t mean that you cannot have smaller Discos that are ready to invest in your unserved communities. So we are looking at franchising.”

Commenting, a member of the committee, Senator Danjuma Goje said, “The Discos have not added anything significant to the power sector, but are just going about collecting money.

“The Discos are complete failures and should be overhauled. They have failed to live up to expectations and we have so many complaints about their poor performances.”

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