Banks may take over more Power Distribution Companies (DisCos) because of their inability to defray the debts they owe them.
The DisCos are owing the banks at least N819.9 billion in the form of loans they acquired. And the banks are expected to take at least 60 percent of their stake if they fail to oh beck the debt.
The Central Bank of Nigeria (CBN) in August 2021 put the acquisition loans to the power firms at N819.97 billion.
The DisCos were privatised in 2013 after the federal government, through the Bureau of Public Enterprises (BPE), received $1.256bn as payment for 60 per cent stakes in 10 DisCos in 2013 and that of Kaduna DisCo in 2014 from investors.
The government retained 40 percent stakes in the DisCos making it the minority shareholder.
The bureau also got another $1.269bn for the sale of six Generation Companies (GenCos), an upstream section of the power sector value chain. The two transactions amounted to $2.525bn which was put at N404bn as of November 2013 when a dollar was about N180.
Documents showed that a major part of that fund was borrowed by the investors from banks and with the official dollar to naira rate jumping to over N400 presently, the loan repayment value plus accruing interest is very high.
While the power firms grapple with the acquisition loans, they have been unable to utilise the N213bn Nigerian Electricity Market Stabilisation Fund (NEMSF).
NEMSF is a 10-year loan from CBN in 2014 to stabilise their operations.
That notwithstanding, power shortages persist as customers can’t get meters and the electricity market shortfall has climbed to over N1.7 trillion.
Presently, power generation has not improved beyond the average 4,000 megawatts (MW) daily and there is still high Aggregate Technical, Commercial and Collection (ATC&C) losses across the DisCos.
Average monthly energy remittance from the DisCos to the GenCos which improved at the initial take over stage had dropped to below 40% monthly, while over six million of the about 12 million registered electricity consumers do not have meters.