FG takes bold step to address  persistent power shortages

In a bold move to address the persistent power shortages plaguing the country, Nigeria’s government is contemplating the transfer of its ownership in 11 power distribution companies (DISCOs) to state governments.

This hint was dropped in a tweet by the Minister of Power Adebayo Adelabu at the weekend who also noted that in exchange for handing over FG’s 40 per cent stake to states, the latter will swap their share of Niger Delta Power Holding Company Limited (NDPHC) to FG.

“To enhance state involvement, we’re exploring the idea of unbundling regional Discos into different states for more localized oversight. We’re also looking into financial collaboration between federal and state governments, potentially involving a swap of stakes in DISCOs with state stakes in the Niger Delta Power Holding Company.

Niger Delta Power Holding Company Limited (NDPHC) is a limited liability company that serves as the legal vehicle to hold the NIPP assets using private sector-orientated best business practices.

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“We are committed to collaborating closely with the state ministries of power to tackle challenges in the distribution segment, considering its retail nature,” he stated in the tweet.

Nigeria, Africa’s most populous nation with over 200 million people, faces a significant gap between its installed power generation capacity of 12,500 megawatts and the actual power distributed, estimated at around 4,000 megawatts.

This disparity has left millions of households and businesses dependent on generators for electricity.

It would be recalled that President Bola Tinubu an assumption of office signed into law the Electricity Act which gave States more power to regulate the sector.a

This new legislation also allows state governments to generate and distribute power, a stark shift from the previous law that vested exclusive rights in the hands of the federal government.

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For over 62 years, the country’s electricity value chain, from distribution to generation and transmission, has been bedevilled with challenges.

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The government attempted to break the jinx in the country’s ailing power sector, first with the establishment of the defunct 2005 Electric Power Sector Reform (EPSR) Act, then on November 1, 2013, the commencement of the privatisation process.

However, a decade later, the problems of the power industry have remained unsolved, becoming a persistent clog in the wheel of progress for Nigeria’s economy.

The electricity distribution companies are battling with liquidity issues and low remittance compounded by the metering gap; still, the generation companies struggle with poor investment and transmission inadequacies, leading to incessant grid collapses.

For years, the country has struggled with 5,000 megawatts of electricity daily for a population of over 200 million people.

According to the Nigerian Electricity Regulatory Commission, NERC, report for the second Quarter of 2023, the 26 power plants’ generation capacity dropped to 4,387.91MW.