Electricity consumers under the Nigeria Consumer Protection Network,has commended the Federal Government for dissolving boards of five electricity distribution companies on account of their financial insolvency.
Kunle Olubiyo,the president of the group,said in a statement said that the present efforts to clean up the mess and free the Economy held by its jugular by the non performing power companies was a welcome development.
He lamented that the mid term review ought to have taken place five years into the privatisation exercise, but it was not done across board.
He added :”The open book review,service level agreement ,mass metering,investment in network improvement and overhaul,ATC & C losses ,governance structure,failed in all benchmarked global best practices and key performance indicators .As against investment in immediate, medium and long term , what we had is rent seeking , profiteering and lack Fiscal responsibility and much needed discipline.
“No sector can survive if and where there are no sanctions for Impunity and no consequences for Infractions .In the prevailing circumstances ,we are on the same page with relevant stakeholders in the present efforts to clean up the mess and free the economy held by its jugular by the non performing utilities”
Besides,a professor of energy law,Yemi Oke,reiterated that the crisis in the power sector would consume more banks under heavy burdens of power-sector acquisition financing/lending.
According to him,eighty percent of the power distribution companies in Nigeria are technically insolvent, hence the problems of the power sector may continue.
He added: “We’ll continue to experience an average of 5-6 national Grid/system collapses per annum”
The Federal government had Tuesday announced the restructuring of five electricity distribution companies, (DISCOs)
The Executive Chairman of the Nigerian Electricity Regulatory Commission (NERC), Sanusi Garba, and Director-General of the Bureau of Public Enterprises (BPE), Alex Okoh. disclosed this in a statement
They explained that the announcement followed Fidelity Bank’s activation of the call on the collaterised shares of KEDCO, BDEC, and Kaduna Electric over their inability to repay loans obtained to pay for assets acquired in the 2013 privatisation exercise
The affected companies are Kano Electricity Distribution Company (KEDCO), Ibadan Electricity Distribution Company (IBEDC), Benin Electricity Distribution Company (BEDC), Kaduna Electric, and Port Harcourt Electricity Distribution Company (PHED)..
The Asset Management Corporation of Nigeria (AMCON) they stated, would be a placeholder board for IBEDC in a temporary capacity while the PHED undergoes restructuring to prevent its imminent insolvency.
They added that the new boards for the affected discos have been approved and the bureau was collaborating with the Central Bank of Nigeria (CBN) and the Ministry of Power to ensure no service disruptions during the transition.
“Fidelity Bank’s action is a contractual and commercial intervention and is between the Core Investors in the DISCOs and the lender. BPE is involved because of the 40% shareholding of Government in the DISCOs. Fidelity Bank has informed us that the new Board members of the affected DISCOs will be as follows:
– Kano DISCO: Hasan Tukur (Chairman), Nelson Ahaneku (Member), Engr. Rabiu Suleiman (Member)
– Benin DISCO: KC Akuma (Chairman), Adeola Ijose (Member), Charles Onwera (Member)
– Kaduna DISCO: Abbas Jega (Chairman), Ameenu Abubakar (Member), Marlene Ngoyi (Member)”
“BPE has nominated Bashir Gwandu (Kano), Yomi Adeyemi (Benin), and Umar Abdullahi (Kaduna) as independent Directors to represent Government’s 40% interest in the three DISCOs respectively, during this transition.We 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 DISCOs’ shares in perpetuity.
“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.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)”
The statement also disclosed that in the interim, NERC and BPE met on an Emergency Basis and activated the Business Continuity Process and have appointed interim Managing Directors in the affected DISCOs.
Kano Disco – Ahmad Dangana, Benin Disco – Henry Ajagbawa, Kaduna Disco– Yusuf Usman Yahaya
Also, with the takeover of Ibadan DISCO by AMCON, the BPE has obtained approval from NERC to appoint Kingsley Achife as the interim Managing Director.
In a temporary capacity the leadership of AMCON will be a placeholder Board for the Ibadan franchise (Ahmed Kuru – Chair, Eberechukwu Uneze – Member, Aminu Ismail – Member). Oluwaseyi Akinwale will represent the interest of Government on the Board alongside the DG of BPE.
“Lastly, we are re-structuring the Management and Board of Port Harcourt DISCO to forestall the imminent insolvency of the entity.As a condition for support to the 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. Benson Uwheru will take over as the Managing Director of PHEDC as part of the changes.
“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.”
Meanwhile,the management of Kaduna Electric has urged its staff to remain calm and go about their regular schedules as the firm’s offices would remain functional immediately.
