The Bureau of Public Enterprises (BPE) has concluded the takeover of four electricity distribution companies (DisCos).
The DisCos – Kaduna, Kano, Ibadan and Port Harcourt – were taken over to avoid them folding up under the weight of debts they owe to banks.
The Director-General of the BPE, Alex Okoh, announced the completion of the takeover at a presentation made at a virtual meeting of the National Council on Privatisation (NCP) last week.
This is according to a press release from the office of Vice President Yemi Osinbajo, signed by his Senior Special Assistant to the President on Media & Publicity, Laolu Akande.
The press release noted that Mr. Okoh also said the challenge in the takeover of the Benin DisCo was being addressed.
He added that BPE is fast tracking the concession of the Zungeru Hydroelectric Power Plant.
Weight of Acquisition Loans
In July, Fidelity Bank and the Assets Management Corporation of Nigeria (AMCON) announced they were starting the process of taking over the Kaduna, Benin, Kano, and Ibadan Distribution Companies due to defaults on their 2013 acquisition loans.
The BPE also announced the restructuring of the Port Harcourt DisCo in the same month.
UBA had earlier taken over the Abuja DISCO in December 2021 over the company’s default on its 2013 acquisition loan.
In August 2012, the Central Bank of Nigeria put the acquisition loans to the power firms at N819.97bn.
The DisCos were privatised in 2013, with the federal government receiving $1.256bn as payment for 60% stakes in 11 of them.
The government retained a 40% stake in each DisCo, which it holds through the BPE.
Documents show that the private investors borrowed most of the acquisition funds from banks at a time when the exchange rate was N140 to the dollar.
The official exchange rate has since increased to over N400, making it difficult for the companies to repay the loans.
In addition to that, some of the investors in the DisCos have been accused of a lack of capacity to operate power companies.
