Power Firms Debt Hits N862.14 Billion Amid Worsening Electricity Crisis

According to the Central Bank of Nigeria data, the debt owed to Nigerian banks by operators in the power sector rose by 12.83 percent in one year to N861.14 bn in December 2021 amid the lingering problems plaguing the sector since it was privatised over eight years ago, according to the Central Bank of Nigeria data.

The nation’s distribution and generation companies were privatised through the Bureau of Public Enterprises, fetching about $3.2bn for the Federal Government, as the Discos and Gencos were sold for $1.7bn and $1.5bn, respectively in November 2013

The six successor power generation companies and 11 distribution firms that were unbundled from the defunct Power Holding Company of Nigeria were officially privatised by the Federal Government

Acquisition of the power generation companies by the core investors was financed mostly by debts, a significant portion of which was provided by local banks.

According to the figures obtained from the CBN, power generation firms and independent power producers increased their total debt to N522.2bn in December 2021 from N443.37bn in December 2020

As of  December 2021, transmission and distribution firms owed banks N338.94bn up from N319.85bn a year earlier.

These have made stakeholders express their concern over the viability of the privatisation of the distribution and generation arms of the industry over eight years ago, which is yet to have a positive impact on Nigerians

They stated that the recent takeover or re-acquisition of some power distribution companies by a Deposit Money Bank, the Asset Management Corporation of Nigeria, and another investor, for instance, showed that all was not well with the Discos.

Chris Akamnonu, who served as managing director in three Discos in the South-East and South-West for about 13 years, said: “The situation is more complex than the ordinary person sees. The entire experiment may not be yielding the desired results; that is the frank truth.”