Power generation and distribution companies owe Nigerian banks N836.09bn amid the lingering problems plaguing the sector since it was privatised over eight years ago.
This is according to the Central Bank of Nigeria’s June 2022 data obtained by The Punch.
While power generation firms and independent power producers owed banks N562.19bn, power transmission and distribution firms were indebted to the tune of N273.89bn.
The PUNCH had reported in July 2020 that the core investors in the distribution companies were looking to restructure the loans advanced to them by banks for the acquisition of the power assets.
In November 2013, the nation’s distribution and generation companies were privatised through the Bureau of Public Enterprises, fetching about $3.2bn for the Federal Government. The Discos and Gencos were sold for $1.7bn and $1.5bn respectively.
The Federal Government officially privatised the six successor power generation companies and 11 distribution firms that were unbundled from the defunct Power Holding Company of Nigeria.
The acquisitions by the core investors were financed mostly by debts, a significant portion of which was provided by local banks.
The PUNCH had reported on Tuesday that the crisis rocking Nigeria’s power sector seems to be expanding annually despite efforts by the Federal Government and the private sector in managing it.
From power generation to transmission down to distribution, there have been diverse concerns, as well as in other arms of the business such as in the regulation of the industry.
These concerns have made stakeholders express doubts over the viability of the privatisation of the distribution and generation arms of the industry.
They stated that the recent takeover or re-acquisition of some power distribution companies by a Deposit Money Bank, the Asset Management Corporation of Nigeria and another investor, for instance, showed that all was not well with the Discos.
Chris Akamnonu, who served as managing director in three Discos in the South-East and South-West for about 13 years, told The PUNCH, “The situation is more complex than the ordinary person sees. The entire experiment may not be yielding the desired results; that is the frank truth.”
In July this year, it was reported that the Federal Government alongside Fidelity Bank and AMCON had taken over the affairs of five electricity distribution companies, also known as DISCOs, over debts owed to Fidelity Bank.
The affected companies were Kano Electricity Distribution Company, Ibadan Electricity Distribution Company, Benin Electricity Distribution Company, Kaduna Electric, and Port Harcourt Electricity Distribution Company.
The companies had failed to repay loans obtained to pay for assets acquired in the 2013 privatisation exercise.
Also, the government, through its BPE, announced that with the takeover of Ibadan Disco by the AMCON, the BPE had obtained approval from the Nigerian Electricity Regulatory Commission to appoint an interim managing director for the distressed power firm.