For failing to meet the terms of agreement, 11 power distribution companies (Discos) that bought over the assets of the defunct Power Holding Company of Nigeria (PHCN) risk losing about N200 billion investment.

The power firms were handed over to their new investors on November 1, 2013 despite stiff resistance from labour unions. Four years after the take-over of the assets, the investors have failed to meet the expectations of Nigerians, in terms of increasing generation capacity and metering.

Daily Sun gathered that part of the agreement the investors reached with the federal Government inject money to fund its operations, which is not being done at present.

Highlighting the Discos’ failure to keep to the agreement, former Minister of Power, Prof Barth Nnaji, had, during the Nigeria Gas Association (NGA) Natural Gas Business Forum held in Lagos last week, told Daily Sun that majority of the Discos and Gencos had reneged on the agreement they had with the Federal Government before the assets were sold to them.

He said under the agreement, the power investors had a six-year period to deliver on their mandate, or the Federal Government will take over their assets.

Nnaji advised the power investors to shop for co-investors in order to avoid the assets being taken over by the Federal Government, saying 10 per cent ownership of a viable business was better than 100 per cent of nothing that works.
The former minister also said that apart from having financial capability, the Discos were under obligation to have technical know-how.

Said he: “The conditions we set out for privatisation then were that every single company bidding to acquire the asset must have two things: technical capability and financial capacity. If you don’t have any of those, you don’t qualify. But if you have both, you should not have a problem either as a generation or distribution company.”

Nnaji, who is currently the Chairman of Geometric Power Limited, explained that the intention of government for privatising the power sector was to ensure that both distribution and generation of power was taken out of the control of government, with the agreement that investors will reduce Average Technical and Commercial Losses (AT& C) to a certain level that an investor bided, for which he said was the actual bid.

Minister of Power, Works and Housing, Mr. Babatunde Raji Fashola, had, two weeks ago, during the 16th monthly meeting with operators of the power sector, threatened to sack the management of any Disco that failed to deliver on its mandate.

The Discos, under their trade association, Association of Nigerian Electricity Distributors (ANED), had stated in March that the revenue shortfall in the market had reached N809.8 billion, an indication that all was not well with their operations.

ANED’s Director of Research and Advocacy, Mr. Sunday Oduntan, had claimed that the amount, which covers the period from November 1, 2013 when the new owners of power companies took over, to date, includes a balance of N90.41 billion from the N213 billion interventions by the Central Bank of Nigeria (CBN) to pay-off gas supply legacy debt.

http://sunnewsonline.com/privatisation-power-firms-risk-takeover-over-cash-crunch/

They ain't effective...

This is a simple something.
Why cant these DISCOs go into partnership with Pre-paid meter companies and have them supply meters and also have a plan on how to recoup their money.

For them to invest in the DISCOs, they should have a strong financial base because this is a longterm profit biz. This is not a business you buy today and expect to make profit the next day. Infact they should expect a constant injection of funds prolly for d next 7-10yrs to upgrade equipments et al.

They keep making things look like Rocket science in Nigeria. Like Nnaji rightly said, they should seek for co-investors with strong finance base and the govt should give them a time frame or revoke the DISCOs from them

I vote for take over or resale


Discos should be FraudsCos

No light , no meter , ( that first one is a lie, power has improved)


I am just angry Jonathan sold the company to family and friends, even if he had sold to a chinese or japanese energy firm, we wouldn't be having power problems anymore

What do you expect frm them; when it is government utilities that they acquired, what is on their mind is to recoup their money in a year then start milking Nigerian and live larger than life at our detriment.

U simply can't eat your cake and have it, they just want to milk us dry immediately with no proper logistics (some of us can't even access their prepaid metre)...having noticed their shortcomings in the financial stability n power distribution too, the only thing that could sustain or deliver their mandate is partnership. Atimes I wonder how some firms run their stuffs especially wen there's a red flag that simply needs assistance. DISCO should get ready to dance to their tunes.