News

Poor Power Supply: FG To Unbundle 11 Discos, Orders Sale Of Four

Published

2 years ago

April 23, 2024

Editor

Power distribution companies in Nigeria are currently being unbundled along state lines due to their large sizes which often result in inefficiency and ineffectiveness, the Federal Government declared on Monday.

It stated that the privatisation of the firms would not be reversed, but stressed that the Discos would be broken into more efficient structures along state lines so as to be able to deliver on their mandates.

This came as the Federal Government also ordered the sale of Discos that have been taken over by banks and the Assets Management Corporation from its original investors/owners.

Currently, four Discos are under the management of banks and AMCON.

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

The Ibadan Electricity Distribution Company is under the AMCON management.

The four Discos are under these new managements due to their inability to repay their loans to the financial institutions.

The government stated that those who acquired the Discos when the firms were officially privatised in November 2013, lacked the required expertise and financial capacity to run the companies.

This came as the Senate Committee on Power lambasted the Discos for being so inefficient since they took over the privatised assets over 10 years ago, and called for the overhaul of the power firms.

In his address, while playing host to the Senate Committee on Power, led by their Chairman, Senator Eyinnaya Abaribe, the Minister of Power, Adebayo Adelabu, stated that the Federal Government had commenced the restructuring of Nigeria’s 11 power distribution companies.

He also revealed that over 100 projects of the Transmission Company of Nigeria have not been completed since 2001, a period of about 23 years.

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 in 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 own right in the Discos. We are also planning to franchise the unserved communities under the Discos.”

The minister went ahead to state that “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.”

Adelabu further revealed that the Oyo State Government had written to the Federal Government stating that it wants to exercise its rights in Ibadan Disco.

He said the Nigerian Electricity Regulatory Commission has been made to realise that it must sanction Discos that fail to perform, as the licences of some of the power firms might be withdrawn for non-performance.

“We are transforming the Discos and very soon you’ll see that a lot of tough decisions will be taken against these Discos because they are the last mile in the sector. If they don’t perform then the entire sector is not performing.

“So we have put pressure on NERC to make sure that it raises the bar on the activities of the Discos. If it has to withdraw licences for non-performance, why not? If it has to change the boards and managements, why not?

“And all the Discos that are still under AMCON (Asset Management Corporation of Nigeria) and some lenders (banks), within the next three months they must be sold to a technical power operator with a good reputation in utility management.

“We can no longer afford AMCON to run our Discos. We can no longer afford the banks to run our Discos. This is a technical industry and it must be run by technical experts,” the power minister stated.

Also commenting on the non-performance of Discos, 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.”

The Senate committee also authorised an investigative hearing on the electricity tariff hike and stated that this would be held on April 29, 2024, at the Senate.

Privatisation problems

The power minister told his guests that those who acquired the Discos when they were privatised, lacked the required expertise and financial capacity.

Adelabu said, “Our problem started from the privatisation era. Not that the privatisation has a problem in itself, but its implementation and execution have robbed the process of its laudable objectives.

“We believe that people who bought the power companies do not have the required expertise to run the utility firms. Secondly, they were not buoyant enough in terms of financial buoyancy to pay for the power plants.

“All of them used bank loans to pay for the assets. And we all know that the power business is a long-term business. It is not something you recoup your capital and make profit in a short time. So they were all under pressure to repay the bank loans that they used to acquire the power companies.

“This is why today a number of them have been taken over by their lenders, either AMCON or the banks, both local and international banks. They also promised to invest and enhance the distribution network, but they did not do this.”

The minister stated that the investors had promised to reduce the losses in the Discos, but stressed that up till now the losses had remained at about 40 per cent across the power value chain.

“So the Discos are not investing as expected,” Adelabu stated.

100 uncompleted projects

The minister told the lawmakers that over 100 power transmission projects have not been completed since 2001.

“Since 2001 till date we have over 100 uncompleted projects of the Transmission Company of Nigeria. So when we say the government has spent so much in the sector, it is true. But all the spendings have not translated to good impact on power users.

“This is because majority of these projects have not been completed, though some of them are 80 or 90 per cent completed. We have over 65 projects on power substations that are still ongoing since 2001, which is 23 years ago.

“We have about 62 lines projects across the country that were started and have not been completed. And these are being affected by exchange rate calculations, inflation, variations, etc. One thing about power projects is that if they are not completed 100 per cent, you cannot energize them,” Adelabu stated.

He said all the investments are just there lying in waste, “but we are saying that this year we must ensure that a significant number of these projects are completed so that Nigerians can enjoy the investments in the transmission company.”

On the metering gap in the power sector, the minister stated that a company received $200m in 2003 to provide three million meters but failed to do so.

“In 2003, the metering gap was less than four million meters and the Federal Government gave out $200m to a particular company to acquire three million smart meters for the industry. It was a revolving loan.

“But it is sad to let you know that this is 21 years after, no single meter was acquired by this company and the $200m which was N32bn at the time, nothing was got from the money until Mr President just gave us the approval to terminate this loan.

“He also asked us to implement the metering of the Nigerian Army formations to the tune of N12bn. You can imagine if we had acquire three million meters 21 years ago. Today the metering gap that we have is over eight million out of over 12 million customers of the power sector,” the minister stated.

Adelabu, however, noted that the Federal Government was working hard to close the metering gap.

“Mr President has come to our aid on this by forming a Presidential Metering Council, which I’m the Chairman, and he has given us a mandate that a minimum of two million meters should acquired and distributed to Nigerians every year.

“This is going to continue till the next four to five years, so that the current eight million metering gap that we have will be closed over the next four to five years.

“The funding for this project is being sourced. We have been given a seed capital of N75bn and the Nigeria Sovereign Investment Authority is coming to our aid in terms of capital for this,” Aselabu stated.

The minister also stated that the target of the Federal Government is to achieve 6,000MW of power before the end of this year, adding that this has been submitted to the President.

He called for the payment of the outstanding debts to gas companies and power generation firms.

He said the government is currently talking with two investors that should invest in the construction of 3,000MW of solar-power projects in various states to support the national grid.

The minister pointed out that Nigeria currently has an installed power generation capacity of about 14,000 megawatts.

He said, “Today we have a total of 13,250MW installed capacity in all the generating units, including hydro plants and thermal plants. If we add the 700MW coming from the recently Zungeru plant we will have close to 14,000MW installed capacity.

“But it is sad to let you know that the highest we have ever generated in this sector is 5,800MW out of an installed capacity of over 13,000MW, which is less than 50 per cent. The infrastructures are there lying fallow without adequate maintenance and the turbines are getting rusty.

“Two things are responsible, which include the inadequate transmission capacity to evacuate this power even when it is generated. The second thing is the inadequate demand coming from the Discos because they are not getting full payments from the consumers when they distribute power to them.”

Adelabu said the 5,800MW was generated in March 2021, which was over three years ago.

“But we believe that with good investments and demand for power, we can increase power generation to over 8,000MW once there is adequate infrastructure,” he stated.

PUNCH

Related Topics:Electricity tariff national grid

Up Next

See Photos Inside The Most Expensive School In Nigeria

Don't Miss

JUST IN: Court Orders EFCC To Serve Yahaya Bello N80bn Fraud Charges Through His Lawyer

Comments

News

Xenophobic Attacks: Oshiomhole Tells FG To Retaliate Against South African Companies In Nigeria

Published

3 hours ago

May 5, 2026

Editor

Senator Adams Oshiomhole has called on the Federal Government to retaliate against South African businesses operating in Nigeria following the recent attacks on Nigerians in South Africa.

Speaking during plenary on Tuesday, Oshiomhole said the Federal Government should consider revoking the working license of South African owned companies such as MTN and DSTV.

He argued that Nigeria must respond firmly to what he described as persistent hostility against its citizens.

“I am not going to shed tears. If you hit me, I hit you. I think it is appropriate in diplomacy. It is an economic struggle,” Oshiomhole said.

He argued that while some South Africans accuse Nigerians of taking their jobs, Nigerians should return home and take over employment opportunities created by major South African companies operating in the country, including MTN and DSTV.

“When we hit back, the President of South Africa will not only talk but will also go on his knees to recognise that Nigeria cannot be intimidated.

“We will not condone any life being lost. If a crime has been committed under the South African law they have the right to bring any such person to justice, but to kill our people as if we are helpless, we will not allow that,” Oshiomhole added.

DAILY POST reports that several Nigerians in South Africa have reportedly been attacked, and their businesses destroyed, in ongoing xenophobic attacks in the country.

News

IGP Orders Officers Display Name Tag On Uniform, Gives Update On State Police

Published

3 hours ago

May 5, 2026

Editor

The Inspector General of Police, IGP, Tunji Disu, has ordered all police personnel to always have their name tags on their uniforms for easy identification.

Disu disclosed that only police personnel who are undercover are exempted from displaying their name tags.

Speaking on Tuesday, Disu said: “All police officers should have their name tags. All of us on the high table have our names apart from the undercover among us so if you look at all the Commissioners of Police we have our name tags, so it’s not our standard.

News

Court Orders SERAP To Pay DSS Operatives N100m For Defamation

Published

8 hours ago

May 5, 2026

Editor

The High Court of the Federal Capital Territory has ordered a non-governmental organization, the Socio-Economic Rights and Accountability Project, SERAP, to pay N100 million as damaged to two operatives of the Department of the State Services, DSS, for unjustly defaming them in some publications.

The court also ordered SERAP to tender public apologies to the defamed officers,
Sarah John and Gabriel Ogundele, in two national newspapers, two television stations and its website.

Besides, the organization was also ordered to pay the two operatives N1 million as cost of litigation and 10 percent post-judgment interest annually on the judgment sum until it’s fully liquidated.

Justice Yusuf Halilu of the High Court of the Federal Capital Territory gave the order on Tuesday while delivering judgment in a N5.5 billion defamation suit instituted against SERAP by the DSS operatives.

The judge found SERAP liable for unjustly defaming the two DSS operatives with allegations that they unlawfully invaded its Abuja office, harassed and intimidated its staff, in September 2024.

In the offending publication on its website and Twitter handle, SERAP alleged that the two operatives unlawfully invaded and occupied its office with sinister motives.

The judge held that the publication was in bad taste especially from an organization established to promote transparency and accountability, as nothing in the publication was found to be truthful.

The DSS staff had listed SERAP as 1st defendant in the suit marked CV/4547/2024. SERAP’s Deputy Director, Kolawole Oluwadare, was listed as the 2nd defendant.

In the suit, the claimants – Sarah John and Gabriel Ogundele – accused the two defendants of making false claims that they invaded SERAP’s Abuja office on September 9, 2024..

Counsel to the DSS, Oluwagbemileke Samuel Kehinde, had while adopting his final address in the mater urged the judge to grant all the reliefs sought by his client in the interest of justice.

He admitted that although the names of the two claimants were not mentioned in the defamation materials, they had however established substantial circumstances that they are the ones referred to in the published defamation article by SERAP on its website.

The counsel submitted that all ingredients of defamation have been clearly established and the offending publication referred to the two officials of the secret police.

However, SERAP, through its counsel, Victoria Bassey from Tayo Oyetibo, SAN, law firm, asked the court to dismiss the suit on the ground that the two claimants did not establish that they were the ones referred to in the alleged defamation materials.

She said that SERAP used “DSS officials” in the alleged offending publication, adding that the two claimants must establish that they are the ones referred to before their case can succeed.

Similar arguments were canvassed by Oluwatosin Adefioye who stood for the second defendant, adding that there was no dispute in the September 9, 2024 operation of DSS in SERAP’s office.

He said that since SERAP in the publication did not name any particular person, the claimants must plead special circumstances that they were the ones referred to as the DSS officials.

Besides, he said that there is no organization by name Department of State Services in law, hence, DSS cannot claim being defamed adding that the only entity known to law is National Security Agency.

The claimants had in the suit stated that the alleged false claim by SERAP has negatively impacted on their reputation.

The DSS also stated, in the statement of claim, that, in line with the agency’s practice of engaging with officials of non-governmental organisations operating in the FCT to establish a relationship with their new leadership, it directed the two officials – John and Ogunleye – to visit SERAP’s office and invite them for a familiarization meeting.

The claimants added that in carrying out the directive, John and Ogunleye paid a friendly visit to SERAP’s office at 18 Bamako Street, Wuse Zone 1, Abuja on September 9 and met with one Ruth, who upon being informed about the purpose of the visit, claimed that none of SERAP’s management staff was in the country and advised that a formal letter of invitation be written by the DSS.

John and Ogundele, who claimed that their interactions with Ruth were recorded, said before they immediately exited SERAP’s office, Ruth promised to inform her organisation’s management about the visit and volunteered a phone number – 08160537202.

They said it was surprising that, shortly after their visit, SERAP posted on its X (Twitter) handle – @SERAPNigeria – that officers of the DSS are presently unlawfully occupying its office.

The claimant added, “On the same day, the defendants also published a statement on SERAP’s website, which was widely reported by several media outfits, falsely alleging that some officers from the DSS, described as “a tall, large, dark-skinned woman” and “a slim, dark skinned man,” invaded their Abuja office and interrogated the staff of the first defendant (SERAP).

John and Ogundele stated that “due to the false statements published by the defendants, the DSS has been ridiculed and criticised by international agencies such as the Amnesty International and prominent members of the Nigerian society, such as Femi Falana (SAN)”.

“Due to the false statements published by the defendants, members of the public and the international community formed the opinion that the Federal Government is using the DSS to harass the defendants.”

They added that the defendants’ statements caused harm to their reputation because the staff and management of the DSS have formed the opinion that the claimants did not follow orders and carried out an unsanctioned operation and are therefore, incompetent and unprofessional.

The claimants therefore prayed the court for the following reliefs: “An order directing the defendants to tender an apology to the claimants via the first defendant’s (SERAP’s) website, X (twitter) handle, two national daily newspapers (Punch and Vanguard) and two national news television stations (Arise Television and Channels Television) for falsely accusing the claimants of unlawfully invading the first defendant’s office and interrogating the first defendant’s staff.

“An order directing the defendants to pay the claimants the sum of N5 billion as damages for the libellous statements published about the claimants.

“Interest on the sum of N5b at the rate of 10 percent per annum from the date of judgment until the judgment sum is realised or liquidated.

“An order directing the defendants to pay the claimants the sum of N50 million as costs of this action.”