The Federal government has approved the takeover of three non-performing electricity distribution companies (discos) by Fidelity bank.
The Kano Disco, Kaduna Disco, and the Benin Electricity Distribution Companies (BEDC) are the affected companies, and the takeover is due to the power investors’ poor financial performance and non-repayment of loans owed to Fidelity bank. Based on the statutory duties assigned to them by the government, the Nigerian Electricity Regulatory Commission (NERC) and the Bureau of Public Enterprises (BPE) affected the takeover.
How will this affect the power supply in the regions covered by the discos?
Abubakar Aliyu, the Minister of power, revealed in a statement through his media adviser, Isa Sanusi, that NERC and the BPE had briefed him on the subject. The Minister assured consumers that “In implementing the changes, the ministry shall ensure that the changes in corporate governance do not impact on the service and stability of the Discos”.
Six, and counting.
Six discos have now been taken over by the government, including those in Yola, Ibadan, and Abuja. While the NERC and BPE also announced the sack of the Managing Directors of the Kano and Benin discos, the MD of Kaduna Disco, Yusuf Yahaya was not removed, as he was re-appointed under the new takeover regime. Ahmad Dangana and Henry Ajagbawa were subsequently appointed to take over as MD at the Kano and Benin discos respectively.
However, the former management of the Benin disco has dismissed the action of the regulators, saying there was no legal basis for the takeover of the company following the purported activation of the call on its collateralized shares by Fidelity Bank. They warned that “Any attempt by Fidelity Bank and/or BPE to intervene in BEDC in the manner being reported will be illegal, unlawful, and will be resisted.”