House of Reps pushes N500bn recapitalization for DisCos to tackle electricity crisis

In a decisive effort to address Nigeria’s chronic electricity challenges, the House of Representatives has mandated a N500 billion recapitalization for electricity distribution companies (DisCos).

This measure seeks to strengthen the financial foundation of DisCos, enabling them to meet consumer demands and restore confidence in the sector.

The resolution followed a motion titled “Need to Address the Activities of Distribution Companies in Nigeria”, sponsored by Ayokunle Isiaka, the representative for Ifo/Ewekoro Federal Constituency of Ogun State, during the House’s plenary session on Wednesday.

Isiaka’s motion highlighted troubling practices by DisCos, including allegations of coercing consumers into making additional payments for electricity meters they had already financed. He criticized these actions as exploitative, citing their impact on consumer trust and economic stability.

“The House notes that Nigerian consumers paid for electricity meter installation, but DisCos are demanding additional payments for the replacement of these meters under dubious pretenses,” Isiaka said.

He added that such actions exacerbate the financial burdens on households and businesses already grappling with economic challenges.

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The lawmaker described the DisCos’ practices as tantamount to “sabotaging economic development,” accusing them of weaponizing essential services against citizens, thereby hindering growth and progress.

Speaker of the House Tajudeen Abbas stressed that only DisCos with adequate financial capacity should continue operations.

He called for a recapitalization of at least N500 billion, emphasizing the need for these companies to meet regulatory and operational standards.

The House also directed the Federal Ministry of Power to declare DisCos as non-state actors and address their “reckless” practices that jeopardize Nigeria’s economic stability.

To ensure accountability, the House Committee on Power has been tasked with investigating the activities of DisCos. The committee will also launch consumer awareness campaigns to educate Nigerians on their rights and enforce regulations for greater transparency and fairness in the sector.

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Energy experts have long advocated for the recapitalization of Nigeria’s electricity sector.

Olu Verheijen, energy adviser to President Bola Tinubu, previously noted that the industry requires an estimated N2 trillion ($2.5 billion) to achieve stability and efficiency.

The recapitalization push is expected to bolster the sector’s ability to meet rising energy demands and mitigate the economic challenges associated with unreliable power supply.

As the House moves forward with these resolutions, Nigerians will be closely watching how DisCos respond and whether the measures will bring tangible improvements to the nation’s electricity supply.