The House of Representatives has mandated electricity distribution companies (DisCos), to undertake a N500 billion recapitalisation to enhance their financial stability and ensure they can efficiently meet their obligations to the public.
The resolution followed the adoption of a motion, titled “Need to Address the Activities of Distribution Companies in Nigeria”, sponsored by the member representing the Ifo/Ewekoro Federal Constituency of Ogun State, Ayokumle Isiaka, on the platform of All Progressives Congress (APC), at plenary yesterday.
Moving the motion, Isiaka said recent actions by DisCos have posed a significant threat to the nation’s economic stability and the welfare of Nigerians.
He expressed concern that despite Nigerians paying for electricity metres, distribution companies are still demanding additional payments for replacement of the metres under controversial circumstances.
The lawmaker said: “The House notes that Nigerian consumers paid for electricity meter installation, but DisCos are demanding additional payments for the replacement of these metres under dubious pretences, undermining consumer trust and exacerbating financial burdens.
“The House is concerned that consumers are being coerced into paying for metres they have already financed, putting additional financial strain on households and businesses already facing economic challenges”.
‘DISCOs sabotaging economic development’
He also expressed concern over what he described as sabotage of economic development by DisCos, where essential services are used against citizens, stifling growth and development.
He added that despite constant regulatory oversight and demands for accountability from the committee on power, DisCos had remained recalcitrant, operating with impunity and disregarding consumer rights.
Following the adoption of the motion, the speaker, Tajudeen Abbas, urged DisCos to undergo recapitalisation of no less than N500 billion, adding that only those with the required financial capacity, which could provide maximum satisfaction to consumers, should be allowed to continue operating.
He lamented that despite constant regulatory oversight and demands for accountability from the committee on power, DisCos have remained recalcitrant, operating with impunity and disregarding consumer rights.
Following adoption of the motion, Speaker Tajudeen Abbas urged DisCos to “undergo recapitalisation of no less than N500 billion, and only those with the required financial capacity, which can provide maximum satisfaction to consumers, should be allowed to continue operating”.
Consequently, the House directed the Federal Ministry of Power to declare DisCos as non-state actors and take immediate measures to address their reckless actions which, it claimed, threatened the nation’s economy.
It also mandated its committee on power to investigate the activities of DisCos with the intent to hold them accountable and safeguard consumer rights.
The committee was equally tasked with carrying out awareness campaigns on consumers’ rights and examining the implementation of strict regulations governing DisCos to ensure transparency and fairness in dealings with consumers.
FG moves to sell 60 per cent stake in DisCos
Earlier, the inability of core investors holding 60 per cent stake in the Electricity Distribution Companies, to repay debts owned by the DisCos, has compelled the government to sell its assets in them.
Consequently, Checks by Vanguard, yesterday, indicated that Kaduna Electricity Distribution Company; Kano Electricity Distribution Company; and Abuja Electricity Distribution Company, have already been bought.
While Transcorp Plc bought Abuja DisCo, Future Energy bought Kano DisCos, just as ASI Engineering acquired 60 per cent of Kaduna DisCo.
Vanguard gathered that government is considering the sale of core investors’ interests in Port Harcourt Electricity Distribution Company; Benin Electricity Distribution Company; and Ibadan Electricity Distribution Company.
Sources at the Bureau of Public Enterprises (BPE), declined to disclose the indebtedness of the various DisCos to financial institutions yesterday but a source who pleaded anonymity, said: “It’s a lot of money that amounts to trillions of naira.
“The sale is being considered because of inability of the Electricity distribution companies, DisCos to sustain their capital intensive operations over the years.
It was learned that the development has affected the delivery of adequate and stable power supply to households and businesses.
Executive Director, PowerUp Nigeria, Adetayo Adegbemle, in his immediate reaction to the development yesterday, said: “It is a good decision by government and I hope it will culminate in strengthening and delivering of improved services to consumers”.
