The Chairman of Transgrid Enerco Limited, Engineer Olubunmi Peters, has confirmed the planned acquisition of West Power & Gas Limited’s 60% equity stake in Eko Electricity Distribution Company.
He confirmed the development during the signing of the Share Purchase Agreement (SPA) between Transgrid Enerco Limited and West Power & Gas Limited, the parent company of Eko DisCo.
Nairametrics previously reported that West Power & Gas (WPG), the parent company of Eko DisCo—Nigeria’s second-largest distribution company—will sell its majority stake in the electricity company by April 2025.
Reliable sources with direct knowledge of the transaction confirmed that Transgrid, a consortium comprising North-South Power (NSP), Stanbic Infrastructure Fund (Nigeria’s largest infrastructure fund), and Axxela (a major gas producer in Nigeria), will complete the acquisition in April 2025.
Transgrid Chairman Confirms Deal
- Speaking on Tuesday, Engineer Peters confirmed the SPA for acquiring West Power & Gas Limited’s 60% equity stake in Eko Electricity Distribution Company.
- He described the acquisition as a significant milestone in Nigeria’s power sector, underscoring Transgrid’s commitment to innovation, sustainability, and community-focused solutions within the Eko electricity market.
“With this agreement, we are not just acquiring 60% of Eko Electricity Distribution Company but also embracing the responsibility to deliver reliable electricity, modernize infrastructure, and contribute to Nigeria’s economic growth,” he said.
“Eko DisCo serves as a vital hub for Lagos State and the Agbara community in Ogun State, areas that are the heartbeat of Nigeria’s commercial and industrial growth. Our vision is to elevate its capacity from 513MW to 1,500MW in the next few years through strategic investments, operational excellence, and innovative solutions,” he added in a statement.
- Transgrid promised to adhere to the regulatory framework governing the electricity sector.
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The Chairman acknowledged the role of stakeholders in facilitating the planned acquisition and praised West Power & Gas (WPG) for its efforts in making Eko DisCo one of Nigeria’s top-performing distribution companies since its acquisition during the 2013 privatization program.
“WPG has developed EKEDC into a commercially viable and stable power distribution entity, which encouraged this transaction as the first market-driven distribution company acquisition in Nigeria,” he said.
Engineer Peters also appreciated the contributions of Transgrid Enerco’s partners, including North-South Power, Axxela Limited, and the Stanbic IBTC Infrastructure Growth Fund, lauding their shared vision and expertise.
He assured stakeholders of Transgrid’s dedication to fostering market discipline, transparency, and accountability while collaborating with regulators.
What You Should Know
Nairametrics previously reported that Transgrid won the bid for Eko DisCo after a competitive process in early 2024.
- The consortium has paid the minimum 10% commitment fee as part of the conditions precedent for the transaction.
- The acquisition, valued at over $200 million, is expected to close in early 2025.
- Upon completion, Eko DisCo’s new ownership will include a mix of upstream and midstream players, making it one of Nigeria’s largest integrated electricity distribution companies.
Sources revealed that for NSP, the acquisition ensures greater control over Eko DisCo’s operations and access to its cash flow distribution, which could address challenges posed by other DisCos’ failure to meet remittance obligations.
- Additionally, the growing trend of bilateral contracts between distribution and generation companies offers incentives for power generators like NSP to invest in DisCos.
- Axxela Limited operates a natural gas distribution network spanning over 360 kilometres and has existing embedded power projects with Eko and Ikeja DisCos, providing 100MW and 40MW respectively.
- Stanbic Infrastructure Fund, established in 2021 as a ₦100bn Shelf Programme.
The fund offers a unique opportunity to invest in Nigeria’s power sector, targeting strong cash flow prospects to meet periodic distribution requirements for investors.
The final purchase consideration for the transaction will be determined upon fulfilling the conditions precedent, paving the way for a transformative era in Eko DisCo’s operations.
