The Bureau of Public Enterprises (BPE), says it is necessary to dispel the controversy concerning the recent restructuring following the collateralized shares of some Electricity Distribution Companies (DISCOs).
The Director-General, BPE, Mr. Alex Okoh, said this in a statement issued in Abuja on Friday.
Okoh said the BPE considered it imperative to clear the air on the insinuations and statements emanating from some of the DISCOs which were restructured following the collateralized shares of some of the DISCOs.
He said the BPE had earlier informed the public through the media that a call on the collateralized shares of the core investors of Kano, Benin, and Kaduna DISCOs had been activated by the lenders.
“BPE and the Nigerian Electricity Regulatory Commission (NERC) were informed by Fidelity Bank on July 5, 2022, that a call on the collateralized shares of the core investors of Kano, Benin, and Kaduna DISCOs had been activated by the lenders.
“The lenders’ consortium includes AFREXIM Bank, Keystone Bank, Stanbic IBTC, and Fidelity Bank.
“It is important to note that the action is a contractual and commercial intervention and it is between the core investors in these DISCOs and the lenders,” he said.
Okoh said that BPE’s involvement was to protect the 40 percent shareholding of the Federal Government in the DISCOs.
The director-general said it was on this basis that new boards reflecting the action were constituted.
“The new board members of the affected Kano DISCO are, Hasan Tukur, Chairman, Nelson Ahaneku, and Engr. Rabiu Suleiman is a member, while Benin DISCO has K.C. Akuma, as the Chairman, Adeola Ijose, and Charles Onwera as members.
“Kaduna DISCO has Abbas Jega as Chairman, Ameenu Abubakar, and Marlene Ngoyi as members,”
Okoh said BPE had nominated Bashir Gwandu (Kano), Yomi Adeyemi (Benin), and Umar Abdullahi (Kaduna) as independent directors to represent the government’s 40 percent interest in the three DISCOs during the transition.
He said as the agency representing the interest of the Federal Government in the DISCOs, BPE had already engaged with the Central Bank of Nigeria (CBN) (as the banking sector regulator) for an orderly transition.
“Also to ensure that the lenders do not hold the collateralized shares of the core investors in perpetuity given that they do not have the technical capacity, nor have they been duly authorized to operate an electricity distribution company.’’
Okoh said that the lenders had also assured BPE and NERC that they would participate fully in all the ongoing market initiatives aimed at improving the sector, such as the national mass metering program.
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According to him, it is envisaged that the majority interest in these DISCOs will be sold to competent private sector investors with the requisite technical and financial capacity to re-capitalize and manage these entities efficiently.
Okoh said as an interim measure, NERC and BPE met on an emergency basis and activated the Business Continuity Process, and appointed interim Managing Directors in the affected DISCOs.
They are Kano DISCO, Ahmad Dangana, Benin DISCO, Henry Ajagbawa, and Kaduna DISCO, Yusuf Usman Yahaya.
“It must be reiterated that some of the publications from the core investors of these DISCOs have been quite disingenuous.
“Beyond the financial issues I have just discussed, the DISCOs affected happen to be the worst-performing ones.
“Ibadan is currently being managed by a so-called Receiver Manager as a sole administrator.
“The Receiver Manager has absolutely no capacity to manage a utility and has not been authorized by the regulator as a manager of a DISCO.’’
According to him, Ibadan is the worst performing DISCO as per the Performance Assessment review conducted in December 2021.
The director-general said Ibadan DISCO had retrogressed in terms of their critical performance parameters as contracted in the Performance Agreement signed with the Bureau.
“In fact, the DISCO under the management of the Core Investor, Integrated Energy Distribution and Marketing Limited (IEDM), has performed worse than before it was privatized.”
He said that the performance of Benin, Port Harcourt, Kano, and Kaduna DISCOs had also been abysmal.
“It is necessary to state categorically that the poor performance of these DISCOs represents a clear and present threat to the power sector as a whole.
“No responsible government and shareholder will stand idly by and allow this situation to persist.’’
Okoh assured Nigerians that notwithstanding the challenges in the sector, the government remained fully committed to ensuring optimal performance in the power sector.
According, the government will also not shy away from taking the necessary decisive action to achieve this.
