The Federal Government has announced plans to revoke the licenses and assume control of Distribution Companies (DISCOs) that have accumulated excessive debt and failed to meet performance targets within the next three months.

Several DISCOs, including Abuja Electricity Distribution Company (AEDC), Benin Electricity Distribution Company, Kaduna Electricity Distribution Company, Kano Electricity Distribution Company, and Ibadan Electricity Distribution Company, are currently managed by banks and the Asset Management Corporation of Nigeria (AMCON). These companies have struggled to repay their loans and provide reliable electricity to consumers.

Power Minister Adebayo Adelabu has stated that the power sector has been plagued by crises for decades, with no lasting solutions in sight. He emphasized the government’s determination to break this cycle of inefficiency.

The Federal and State Governments hold a combined 40% stake in all DISCOs. The government intends to increase its involvement in the operational processes of the power sector.

Adelabu acknowledged the challenges facing the sector, including the debt crisis, insufficient customer payments, and low electricity generation capacity. The government plans to address liquidity issues by selling off indebted DISCOs to technical investors. Additionally, it will break up DISCOs on a state basis and expand its own role in the sector.

In related news, Senator Eyinnaya Abaribe, Chairman of the Senate Committee on Power, has announced an investigative hearing to examine the recent electricity tariff hike on April 29, 2014. However, he emphasized that this issue will not be addressed during the current oversight visit. CONTINUE READING