Electricity Supply: FG May Unbundle DISCOs Swap Stakes with States, Says Adelabu

Emmanuel Addeh in Abuja

The federal government may soon begin the unbundling of electricity Distribution Companies (Discos) to limit their franchise areas to states, instead of the current regional arrangement. This was disclosed by Minister of Power, Mr Adebayo Adelabu, at the weekend, during a meeting with the governor of Abia State, Dr Alex Otti, in Abuja.

It was widely perceived that many of the Discos did not have the required capacity to effectively manage the unwieldy franchises they were allocated during the privatisation programme in 2013, thereby contributing to Nigeria’s deplorable power supply situation.

On his X handle, Adelabu, who said he shared the federal government’s short, medium, and long-term strategies with the governor, reiterated his commitment to collaborating closely with state ministries of power/energy to tackle challenges in the distribution segment, considering its retail nature.

The minister stressed the crucial role of state governments in transforming the power sector, describing it as essential.
He stated, “States’ involvement is essential for improving infrastructure, reducing metering gaps, enforcing bill collection, rural electrification, tackling power theft, and securing right-of-way for transmission lines.

“To enhance states’ involvement, we’re exploring the idea of unbundling regional Discos into different states for more localised oversight. We’re also looking into financial collaboration between federal and state governments.
“This will potentially be involving a swap of stakes in Discos with states’ stakes in the Niger Delta Power Holding Company (NDPHC).”
Adelabu explained that his vision included active collaboration in rural electrification. He encouraged states to establish rural electrification boards in coordination with the Rural Electrification Agency (REA).

“States’ support in providing distribution transformers and replacing weak power lines is crucial for maintaining reliable power supplies,” he added.
Adelabu further disclosed that the ministry was hosting the inaugural ministerial retreat for the power sector from December 12 to 14. He said the gathering would be a platform to extensively discuss strategies for revamping the sector.

He invited Otti to the event, recognising the sector’s importance to the economic growth at both national and state levels.
In response, Otti and other dignitaries expressed support for the transformative efforts coming up in the sector. He noted that Abia State’s commitment aligned with the federal ministry’s vision for a robust and efficient power sector. The governor stressed that he looked forward to a productive collaboration to drive positive change in the Nigerian power landscape.
Nigeria, a country of over 200 million people, currently supplies an average of 4,000mw of electricity to its citizens, with majority of the people depending on generating sets to power their homes and offices.