As part of measures to put the power sector on the path of financial viability, the Federal Government is proposing measures to recapitalise the eleven electricity distribution companies (DisCos).
Two options under consideration, according to the Power Sector Recovery Implementation Programme (PSRIP) recently approved by the Federal Government and seen by BusinessDay, involve using the Central Bank to facilitate renegotiation of the shareholder loans outstanding and redenomination of the loans from dollars to naira, in line with the discos revenue profile.
Another option under consideration is the potential dilution of both the Federal Government’s and privately held stakes, which will help bring some stability to DisCos balance sheet.
In 2013 when the Discos invested US$ 1.42billion to acquire 60 percent stake of the privatised power assets, they were allowed to borrow up to 70 percent of this amount, which the Government guaranteed through the Put-Call option in the Performance Agreement and Direct Agreement with lenders.
ISAAC ANYAOGU
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