The Federal Government has announced the restructuring and take-over of 5 electricity distribution companies (DisCos) across the country by some banks in a move that might not be unconnected with their inability to meet up with the repayment of its debt obligations.
This follows the activation of the call on the collateralized shares of Kano, Benin and Kaduna DisCos by Fidelity Bank with the initiation of action to take-over the boards of these DisCos and exercise rights on the shares.
This disclosure is contained in a statement jointly signed by the Executive Chairman of the Nigerian Electricity Regulatory Commission (NERC), Sanusi Garba, and the Director-General of the Bureau of Public Enterprises (BPE), Alex Okoh, on Tuesday.
List of new board members for the affected DisCos
- Fidelity Bank listed the new board members of the 3 affected DisCos to include; Kano DISCO: Hasan Tukur (Chairman), Nelson Ahaneku (Member), Engr. Rabiu Suleiman (Member); Benin DISCO: KC Akuma (Chairman), Adeola Ijose (Member), Charles Onwera (Member) and Kaduna DISCO: Abbas Jega (Chairman), Ameenu Abubakar (Member), Marlene Ngoyi (Member).
- BPE nominated Bashir Gwandu (Kano), Yomi Adeyemi (Benin), and Umar Abdullahi (Kaduna) as independent Directors to represent Federal Government’s 40% interest in the 3 DISCOs respectively, during this transition.
- Also, NERC and BPE met on an Emergency Basis and activated the Business Continuity Process and have appointed Ahmad Dangana, Henry Ajagbawa and Yusuf Usman Yahaya as interim Managing Directors of Kano DisCo, Benin DisCo and Kaduna DisCo respectively.
- The statement also says that with the take-over of Ibadan DisCo by AMCON, the BPE has obtained approval from NERC to appoint Kingsley Achife as interim Managing Director as well as the restructuring of the management and board of Port Harcourt DisCo to forestall the imminent solvency of the entity.
- It stated that as a condition for support to the Port Harcourt entity to meet its market obligations, Iboroma Akpana will take over as the Chairman of the Board.
- Emmanuel Okotete, Eyo Ekpo, Ismaila Shuaibu and the DG of BPE will form the interim Board. Mr, while Benson Uwheru will take over as the Managing Director of PHEDC as part of the changes.
Major shares in affected DisCos to be sold to private investors
Meanwhile, NERC and BPE noted that they are engaging with the Central Bank of Nigeria (as the banking sector regulator) to ensure an orderly transition and to ensure that Fidelity Bank does not hold the Kano, Benin, and Kaduna DISCOs’ shares in perpetuity.
The statement says, ‘’It is envisaged that the majority interest in the entities would be sold to capable private sector investors willing and able to re-capitalize and manage the entities efficiently.
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‘’We have also received assurances that Fidelity Bank will participate fully in all the ongoing market initiatives aimed at improving the sector (e.g. National Mass Metering Program).’’
FG to activate emergency funds and ensure no service disruptions
The government will support the activation of Emergency funds through the Nigerian Electricity Market Stabilization Facility to support the entity while it goes through restructuring and repositioning to serve the citizens of the franchise area better.
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Also, NERC and the BPE says they are working with the Minister of Power to ensure no service disruptions during these transitions and remain committed to supporting the Nigerian Electricity Supply Industry to serve Nigerians better.