Nigerian Government Announces Shakeup in Power Sector: DisCo Privatization and Metering Contract Revocation
The Nigerian government has unveiled a two-pronged approach to address challenges in the electricity sector. In a move aimed at improving distribution efficiency, the Federal Government plans to sell off the five Electricity Distribution Companies (DisCos) currently under the control of banks and the Asset Management Corporation of Nigeria (AMCON).
Power Minister Adebayo Adelabu, during a meeting with the Senate Committee on Power, emphasized the lack of technical expertise among the current managers. He stressed the urgency of selling the DisCos to reputable technical operators within three months. The announcement comes amid persistent blackouts across the country, which DisCos have attributed to insufficient grid allocation and gas shortages affecting generation companies.
Senator Isah Jibrin, responding to the news, expressed concerns about potential asset stripping by outgoing DisCo operators. He urged the government to ensure the companies restore assets to their original state before privatization.
Metering Contract Revoked, New Strategy Unveiled
In a separate but related development, the government revoked a $200 million metering contract awarded in 2021 to Messr Zigglass due to non-performance. President Bola Ahmed Tinubu directed the cancellation, aiming to bridge the eight million metering gap within the next four to five years. The Nigerian Sovereign Investment Authority (NSIA) will reportedly provide funding support for this initiative.
Senate Committee Visits Transmission Company of Nigeria
The Senate Committee on Power also visited the Transmission Company of Nigeria (TCN) during their oversight visit. TCN Managing Director Sule Abdulaziz requested assistance in securing funding for over 120 projects, highlighting challenges related to right of way acquisition and vandalism.
Committee Chairman Senator Eyinaya Abaribe pledged to engage with the government on resolving these issues. He also mentioned plans to scrutinize the implementation of World Bank projects and revisit penalties for vandalizing power infrastructure.
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The government’s actions signal a proactive approach to tackling problems in the power sector. Privatization of the DisCos and a renewed focus on metering infrastructure offer a potential path towards improved electricity distribution and reduced blackouts for Nigerians. The Senate Committee’s commitment to addressing funding and vandalism issues further strengthens this resolve.
