From Uche Usim, Abuja

Following the takeover of three electricity distribution companies (DISCOs) by banks following serial loan repayment default, the Bureau of Public Enterprises (BPE) has said there was no iota of regret in such a development as the government cannot fold its hands and watch privatised entities decay.

Last Tuesday, a call on the collateralized shares of the Core Investors of Kano, Benin and Kaduna DISCOs (takeover) was activated by the lenders’ consortium, which include Afreximbank, Keystone Bank, Stanbic IBTC and Fidelity Bank.

In reaction, the DISCOs said they would not take the matter lying low, vowing to fight back.

BPE Director General, Alex Okoh, in a statement on Friday said the banks’ action was a contractual and commercial intervention and is between the core investors in these DISCOs and the lenders. “BPE’s involvement is to protect the 40% shareholding of the Federal Government in the DISCOs.

“As the agency, representing the interest of the Federal Government in the DISCOs, BPE has already engaged with the Central Bank of Nigeria (as the banking sector regulator) for an orderly transition and to ensure that the lenders do not hold the the collateralized shares of the core investors in perpetuity given that they do not have the technical capacity, nor have they been duly authorised to operate an electricity distribution companies.

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“It is envisaged that the majority interest in these DISCOs would be sold to competent private sector investors with the requisite technical and financial capacity to re-capitalize and manage these entities efficiently.

“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 authorised by the Regulator as a manager of a DISCO.

Ibadan is the worst performing DISCO as per the Performance Assessment review conducted in December 2021. Ibadan DISCO has actually 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.

The performance of Benin, Port Harcourt, Kano and Kaduna DISCOs have 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 and no responsible government and shareholder, would stand idly by and allow this situation to persist”, he explained.