BPE Clears Air On Recent Collaterised Shares Of DisCos

Following the collateralised shares of some Electricity Distribution Companies (DISCOs), the Bureau of Public Enterprises (BPE) says it is important to clarify the controversy concerning the recent restructuring.

Alex Okoh, the Director-General, BPE, made this known in a statement issued in Abuja on Friday.

According to him,  the BPE had earlier informed the public through the media that a call on the collateralised shares of the core investors of Kano, Benin, and Kaduna DISCOs had been activated by the lenders.

“BPE and the Nigerian Electricity Regulatory Commission (NERC) were informed by Fidelity Bank on July 5, 2022, that a call on the collateralised shares of the core investors of Kano, Benin and Kaduna DISCOs had been activated by the lenders.

“The lenders’ consortium includes AFREXIM Bank, Keystone Bank, Stanbic IBTC and Fidelity Bank.

“It is important to note that the action is a contractual and commercial intervention and it is between the core investors in these DISCOs and the lenders,” he said.

According to Okoh, the essence of the involvement is to protect the 40 per cent shareholding of the Federal Government in the DISCOs.

He noted that it was on this basis that new boards reflecting the action were constituted.

“The new board members of the affected Kano DISCO are Hasan Tukur, Chairman, Nelson Ahaneku, and Engr. Rabiu while Benin DISCO has K.C. Akuma, as the Chairman, Adeola Ijose and Charles Onwera as members.

“Kaduna DISCO has Abbas Jega as Chairman, Ameenu Abubakar and Marlene Ngoyi as members.”

Okoh said BPE had nominated Bashir Gwandu (Kano), Yomi Adeyemi (Benin), and Umar Abdullahi (Kaduna) as independent directors to represent the government’s 40 per cent interest in the three DISCOs during the transition.

He said as the agency representing the interest of the Federal Government in the DISCOs, BPE had already engaged with the Central Bank of Nigeria (CBN) (as the banking sector regulator) for an orderly transition.

Okoh said as an interim measure, NERC and BPE met on an emergency basis and activated the Business Continuity Process, and appointed interim Managing Directors in the affected DISCOs.

They are Kano DISCO, Ahmad Dangana, Benin DISCO, Henry Ajagbawa, and Kaduna DISCO, Yusuf Usman Yahaya.

“It must be reiterated that some of the publications from the core investors of these DISCOs have been quite disingenuous.

“Beyond the financial issues I have just discussed, the DISCOs affected happen to be the worst-performing ones.

“Ibadan is currently being managed by a so-called Receiver Manager as a sole administrator.

“The Receiver Manager has absolutely no capacity to manage a utility and has not been authorised by the regulator as a manager of a DISCO."

He also said, according to the Performance Assessment review conducted in December 2021, Ibadan is the worst performing DISCO. 

“In fact, the DISCO under the management of the Core Investor, Integrated Energy Distribution and Marketing Limited (IEDM), has performed worse than before it was privatised.”

He said that the performance of Benin, Port Harcourt, Kano and Kaduna DISCOs had also been abysmal.

“It is necessary to state categorically that the poor performance of these DISCOs represents a clear and present threat to the power sector as a whole.

“No responsible government and shareholder will stand idly by and allow this situation to persist."

He, however, assured Nigerians that challenges in the sector will not affect the performance in the power sector as the government remained fully committed to ensuring optimal performance.