Intense Battle Between Discos, FG Over Purchase Of Power Distribution Companies

An intense battle has developed between the Electricity Deistribution Companies (Discos) and the federal government as a result of Fidelity Bank’s planned acquisition of three power distribution companies and the Federal Government’s restructuring of two further companies.

The Federal Government through the Bureau for Public Enterprise is supporting Fidelity Bank’s takeover of the three Discos.

According to PUNCH, findings revealed that Discos have continued to file new lawsuits to avoid being taken over by the government and the bank.

However, industry stakeholders are divided over the development with both parties receiving commendations and condemnations from power sector experts.

It was noted on Monday that electricity generation on the national grid dropped by 141.3 megawatts as compared to what was recorded on the system on July 9, 2022, even though industry stakeholders expressed a variety of opinions on the trend.

Data obtained by PUNCH from the Federal Ministry of Power showed that power generation rose on July 9, 2022, at 3,992.6 MW, but on July 10, 2022, it plummeted to 3,908.8 MW.

Power generation on the grid as of 6 am on July 11, 2022, was 3,851.31MW, suggesting a loss of 141.3MW when compared to figures reported on July 9, 2022.

Industry experts have expressed a range of concerns over the Federal Government’s recently announced plans to acquire and restructure several power distribution companies.

The Federal Government last Tuesday said that Fidelity Bank Plc has started the process of assuming control of the boards of the three energy distribution companies (Discos) in Kano, Benin, and Kaduna.

Additionally, it stated that the Bureau of Public Enterprises had received authorization from NERC to appoint an interim managing director for the struggling power company following the acquisition of Ibadan Disco by the Asset Management Corporation of Nigeria.

The government further indicated in the restructuring notice from last Tuesday that it was reorganizing the board and management of Port Harcourt Disco to prevent the utility’s impending insolvency. The warning was signed by Sanusi Garba, executive chairman of NERC, and Alex Okoh, director-general of BPE.

The receiver/manager of Integrated Energy Distribution and Marketing Company, however, had argued on Wednesday in response to the announcement that it was the legally and beneficially-owned shareholder with a 60% (controlling and managing) shareholding interest in the Ibadan Electricity Distribution Company.

Also, the management of the Benin Electricity Distribution Company Plc had argued on Wednesday that there was no legal basis for the takeover of the company following the purported activation of the call on its collateralised shares by Fidelity Bank.