Core investors lose discos to new owners as FG wields the big stick

The Federal Government has succeeded in   repossessing the 11 electricity distribution companies (Discos) operating in the country through the back door from the winners of the 2013 power sector privatization exercise, Business Hallmark’s investigation has revealed.

According to BH findings, the 11 discos have been quietly repossessed and are being transfered to new investors, who will  own majority interest in the companies.

This brings to an end the almost one decade legal and regulatory fireworks between the government and the original bid winners.

It would be recalled that  11 electricity distribution companies and six electricity generating companies (Gencos) were carved out of the defunct Power Holding Company of Nigeria (PHCN) and handed over to private investors on November 1, 2013 by the administration of former President Goodluck Jonathan.

While Kann Consortium emerged as the new owner of Abuja Distribution Company (AEDC); Interstate Electrics got Enugu Disco; West Power and Gas got Eko Disco; Integrated Energy Distribution and Marketing Limited secured Yola Disco and EDC/KEPCO Consortium emerged the new owner of Ikeja Disco.

Other winners are Integrated Energy Distribution and Marketing Limited, Ibadan Disco; Vigeo Power Consortium, Benin Disco; Sahelian Power Limited, Kano Disco; Aura Energy Limited; Jos Disco; 4Power Consortium; Port Harcourt Disco and the Northwest Power Limited (NPL), Kaduna Electricity Distribution Company.

Challenge of Investment

A total revenue of $2.32 billion was realized this from the sales, with $1.26 billion coming from the sales of the 11 distribution companies and $1.06 billion from the six generation companies.

Under the arrangement, the new owners became the majority shareholders with 60 percent stakeholding, while the government retained the remaining 40 percent.

The third leg of the power chain, electricity transmission, is retained exclusively by the Federal Government and handed over to the Transmission Company of Nigeria (TCN) for management.

Several years after the privatization exercise, the objectives of the exercise have not been realized, with most homes, offices and industries often in darkness.

While electricity distribution companies and the TCN had taken the blame for the persistent poor power supply, discos are identified as the weakest link in the chain.

For instance, a five-year performance review on the discos done in December 2019 described the discos as ‘technically insolvent’.

The report recommended that in order to rescue the nation’s beleaguered electricity industry, the ailing discos should be recapitalization, and in the worst case scenario, be repossessed by the Federal Government.

Another document by the Ministry of Power tilled: ‘Power Sector Policy Directives and Timelines’, seen by BH shows that the government, as part of its strategies,  considered recovering  power assets from the original bid winners, who were described as ‘failed investors’.

Failed Policy

While advocating for an urgent need to recapitalize the discos, the report described their inability to improve customer service and meet operational costs as a direct consequence of their inability to raise capital.

The ministry further disclosed that the 11 discos’ accumulated debts to the Nigeria Bulk Electricity Trading (NBET) Plc and the Market Operator (MO) had made them technically insolvent.

However, fearing the cost of a bitter and prolonged dispute, especially a clause in the privatization contracts, which requires the Federal Government to pay at least $2.4 billion (about N2.7trillion at the official exchange rate) to repossess the privatized distribution assets from the core investors, the government decided to thread with caution.

An Unlikely Critic

While speaking against the takeover of the discos from the initial core investors, a former Managing Director of TCN, Mr. Usman Mohammed, warned that cancelling the sale of the discos was not in the best interest of the nation.

“If you implemented right things wrongly, you should right the wrong instead of cancelling it. Because when you cancel it, you get it wrong completely. What we need is to correct it, and recapitalization can correct it.

“If we cancel the privatization, we are going to have a contingent liability and we will send a signal to the whole world that Nigeria is not private sector-friendly.

“Secondly, does government have sustainable money to invest in the power sector? No. When you cancel, you will return the money of the investors and you are going to pay them 20 per cent for five years,” the ex-TCN boss had advised the government.

While the hawks in government that demanded an outright cancellation of the licences like former Minister of Power, Babatunde Fashola (SAN), had their say, the doves won the day with government taking to their advice.

Several contacts and sources in the power   industry informed our correspondent that the government had surreptitious repossessed the 11 discos and transfered them to new owners without making noise, nor incurring the huge liabilities that would have resulted from unresolved disputes with investors.

One of the tactics employed by the government, a source in the know informed our correspondent, is the instigation of banks, which loaned funds to investors to acquire the discos, to take over the firms over their inability to repay their loans.

Banking on Bank Debts

“Government’s action to  take over the discos is not a secret among power stakeholders. As I speak, all the 11 discos have been repossessed from the original buyers.

“Though the investors were aware of government’s move, there’s nothing they could do about it.

“The banks are in the business of making profits and are accountable to their shareholders and depositors.

“For over ten years, they  looked for ways to recover the money plus interests they loaned the discos which, were not performing.

“I think the mistake the discos made was to take short-term loans for long term projects. They almost got away with the rape of the nation, especially the windfal from service charges and estimated bills they used to charge their customers.

“But with the stoppage of energy service charge and the enforcement of the provision of prepaid metres to customers, the discos met their waterloo.

“What made the matter worse for the owners was their recklessness and living ostentatious lifestyle from the proceeds of the inefficiency.

“Rather than paying back the loans like their peers in generating business, they were busy buying private jets, luxurious yatches and mansions abroad, not knowing that a Pharaoh, who will not know Joseph will soon come.

“But their day of reckoning had come. Since they were not able to return the money they got from banks, they lost  their companies to new investors.

According to BH findings, Integrated Energy Distribution and Marketing Limited, majority shareholder in Ibadan Electricity Distribution Company (IEDC), was the first casualty of government’s resolve to repossess the unperforming firms.

Pragmatic Strategy

On September 8, 2021, the Assets Management Company of Nigeria (AMCON) secured  preservative orders from a Federal High Court in Ibadan, the Oyo State capital, to take over IEDC.

With the court order,  AMCON went ahead to  appoint Osayaba Giwa-Osagie to take over the entire assets of the disco, its shares and interests in related companies and entities, in addition to the funds kept in 25 commercial banks.

In February 2026, IBEDC reconstituted its Board of Directors to accomodate a new core investor, Sifax Group, following the resignation of AMCON nominees in the firm.

Barely two months after the Ibadan Disco takeover, the vultures struck yet again at the Abuja Electricity Distribution Company (AEDC).

On December 9, 2021, the United Bank for Africa Plc (UBA) took over the Abuja Electricity Distribution Company (AEDC) after receiving the blessing of the Federal Government.

In a curious manner, former Minister of Power, Abubakar Aliyu, had personally announced the takeover of AEDC by the Tier-1 bank, explaining that the bank had to take over the power firm due to the inability of Kann Consortium, AEDC’s major investor, to service the loans it obtained from UBA.

“The AEDC has, of recent, been facing significant operational challenges arising from a dispute between the core investors (KANN Consortium) as owners of 60 per cent equity in the AEDC and UBA as lenders for the acquisition for the majority shareholding in the public utility.

“The UBA, as a lender, and in exercising its rights over the shares of KANN Consortium in the AEDC, has taken over the shares of the obligor in the AEDC.

“This takeover of the majority stake in the AEDC by UBA has consequently led to the reported changes in the management of the AEDC”, the had minister explained.

Changes in shareholding in the AEDC and the appointment of an interim management for the disco by the shareholders were subsequently endorsed by the Nigerian Electricity Regulatory Commission (NERC) and the Bureau of Public Enterprises (as co-shareholders in the AEDC.

In August 2023, Tony Elumelu’s Transnational Corporation (Transcorp) announced the acquisition of 60 per cent equity interest in AEDC, sealing any hope the promoters of KANN Consortium might be having on winning back the firm.

Hardly had the dust that trailed the Abuja Disco’s takeover settled when the hangman struck again on July 6. 2022.

Again, the Federal Government was the harbinger of bad news when it announced the takeover of Kano, Benin and Kaduna electricity distribution companies by Fidelity Bank Plc on that fateful Tuesday night.

“Today we were informed by Fidelity Bank that they have activated the call on the collateralised shares of Kano, Benin and Kaduna (Fidelity and AFREXIM) Discos and that they have initiated action to take over the boards of these Discos and exercise the rights on the shares.

“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 per cent shareholding of government in the Discos”.

The government didn’t stop there. In a notice signed by the BPE and NERC, it announced that it was restructuring the management and board of Port Harcourt Disco to forestall the imminent insolvency of the utility.

The four discos, Kaduna, Kano, Benin and Port Harcourt discos now have new investors after AMCON briefly administered them.

While ASI Engineering Limited (ASI) is the core investor in Kaduna Electricity Distribution Company after a successful acquisition of the 60 per cent equity stake in the firm, Future Energies Africa emerged the core investor in Kano Electricity Distribution Company after it was sold by the BPE.

Emerging Trend

In the same vein, Transgrid  Limited completed the acquisition of 60% stake in Eko Disco from the former core investor, West Power & Gas Limited (WPG), for N360 billion

Unlike ownership takeovers in other electricity distribution companies largely driven by loan defaults or regulatory enforcement actions, the transaction was purely a commercial and strategic acquisition, our correspondent gathered.

A source in West Power & Gas Limited, former owner of Eko Disco, confided in BH that the decision by the promoters of West Power and Gas Limited to divest their majority in the company was a tactical one.

“The previous owners would have ended up losing the company to the government in an hostile takeover.

“That’s why they decided to cut their losses by selling their shares to the new investors for what they can salvage while quietly exiting the scene.

However, the move to take over Ikeja Electric,  is proving to be  problematic.

BH findings revealed that Sahara Energy Resources Group Limited, owners of Ikeja Electric and FBNQuest Trustees Limited, a subsidiary of FBN holdings are currently locked in a vicious ownership battle for the nation’s best performing disco.

FBNQuest Trustees Limited had in August 2025 seized KEPCO Energy Resources Limited, a special purpose vehicle for Sahara Energy Resources Group Limited, owners of Egbin Power, Ikeja Electric and First Independent Power Limited (FIPL).

In executing the takeover, FBNQuest appointed Kunle Ogunba and Associates as its receiver/manager.

But the management of Ikeja Electric kicked against FBN Holdings bid to take over the firm, saying the matter is presently a subject of litigation.

On the other hand, two FG-appointed boards are currently managing the Benin and Port Harcourt Discos pending the completion of their sale and transfer to successful bidders.

The last two legacy electricity distribution companies, Yola and Jos, are currently managed  by government-appointed administrators after the initial core investors relinquished control over the persistent destruction of power assets by terrorists and bandits on rampage in the northern part of the country.

The government has not been able to find new buyers for the two troubled discos despite spirited efforts on its part.

Moving Forward

A director in the federal ministry of power, who spoke on the development said the government is bent on instilling sanity in the power sector and will not relent until it completes the transfer of the remaining under performing discos to competent firms.

Meanwhile, Federal Government has disclosed its readiness to sell the majority interest in the remaining discos to competent investors.

The BPE said in a statement made available to BH that the remaining discos undergoing restructuring are going to be sold to interested buyers.

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

“As an interim measure, NERC and BPE met on an emergency basis and activated the business continuity process and appointed interim Managing Directors in  affected discos”, the BPE boss stated.

Speaking on the development, an energy expert at the University of Lagos, Prof. Yemi Oke, said the nation is in a serious energy crisis and that the problems of the power sector may continue despite the takeovers.

The university don, while revealing that 80 per cent of the discos are technically insolvent, insisted that the BPE and NERC should also be blamed for the poor performance of the discos.

“Who allowed those discos to fail? Who allowed the failed discos to do all the dirty things that brought them to their knees only to come out and scream that they are inefficient?

“Why is it only the discos that the banks are taking over on ground of insolvency? Did the gencos not acquire assets with loan from banks?

“I’m told Mainstream, for instance, got a facility of about $120 million and they have since paid back everything and now making profit from their business. But what about others”, Oke demanded.

In its own reaction, the Nigerian Consumer Protection Network (NCPN) applauded the takeover of the discos, describing it as the right step.

“In the prevailing circumstances, we are on the same page with relevant stakeholders in the present effort to clean up the mess and free the economy held by its jugular by the non-performing utilities”, said Kunle Kola Olubiyo, the President of NCPN

“In the prevailing circumstances, we are on the same page with relevant stakeholders in the present effort to clean up the mess and free the economy held by its jugular by the non-performing utilities”, said Kunle Kola Olubiyo, the President of NCPN