Four states in the franchise area of the Benin Electricity Distribution Company (BEDC) are in talks to acquire the Federal Government’s 40 percent stake in the privatised company on concerns of inefficient service provision and poor investment in the assets of the company.
The Nigerian Electricity Regulatory Commission (NERC) confirmed to Businessday that discussions are ongoing between the governors of the four states comprising Edo, Delta, Ekiti and Ondo, BEDC officials and the commission for possible acquisition of 40 percent equity stake in the company.
James Momoh, NERC chairman, who confirmed this development, said the commission would support any move to improve power infrastructure which would lead to improved power supply to consumers.
“It is a good to have the tripartite arrangement. Our job is to supervise and that discussion is ongoing,” Momoh told Businessday.
“The last time we were in Benin, we had the Disco, the civil society and the state governors’ representatives. The focus is to forge a common front and improve service delivery to the people,” he said.
Efforts to get Sunday Oduntan, executive director, Association of Nigerian Electricity Distributors (ANED), an umbrella body for all 11 Discos including Benin Disco, to comment on the matter proved abortive.
Chuks Nwani, an energy lawyer, said the initiative was good and partnership with the Discos was great. He, however, urged the governors to spend on investment into power infrastructure if they buy the equity stake.
“I like the courage of the governors, but they must be prepared to invest in power infrastructure and ensure that people pay for appropriate pricing of power, and properly metered, to drive cost-efficiency,” Nwani said.
Speaking to Businessday on the sidelines of the just concluded 25th Nigerian Economic Summit in Abuja, Kayode Fayemi, governor of Ekiti State and chairman of Nigerian Governors’ Forum, said the decision of the governors to acquire the Federal Government’s stake in the electricity distribution company was due to the fact that the current operators are not investing in upgrading the assets of the company.
Fayemi opined that the Federal Government should play minimal role in the power sector going forward, asking that state governments be allowed and encouraged to partner with private sector investors to build mini and micro electricity plants in their territory.
“If you take electricity, one of the things we have been trying to do, states that are within the BEDC, which are Edo, Delta, Ekiti and Ondo, we have been trying get approval from the Federal Government to take over the 40 percent shareholding that is still there, because the current operator of Benin Disco, as far as we can tell, are not investing enough,” he said.
Godwin Obaseki, governor of Edo State, who corroborated Fayemi, noted that the state government partnered with investors to raise about $1 billion to build the 450-megawatt Azura power plant.
He said that in Benin City alone, the state has generating capacity of about 900 megawatts. Obaseki, however, lamented that despite the huge investment and the 900-megawatt capacity, Edo State is still in darkness. He raised further concern that the states are hindered by the national constraints as projected by the Federal Government, noting that this had made it impossible for the states to do much.
The electricity distribution companies have been raging over the recent threat by NERC to revoke the licences of eight Discos for failing to meet remittance threshold set for July 2019 and the government’s decision to impose new members on their board.
