The Central Bank of Nigeria (CBN) has said Power Generation and Distribution Companies (DisCos) owe Nigerian banks N836.09bn since it was privatised over eight years ago.
In data released on June 2022, the apex bank disclosed that power generation and independent power producers owed banks N562.19bn in the last eight years.
The CBN added that power transmission and distribution firms were indebted to the tune of N273.89bn.
According to the Punch, the core investors in the distribution companies were looking to restructure the loans advanced to them by banks for the acquisition of the power assets.
Naija News recalls that in November 2013, the nation’s distribution and generation companies were sold for $1.7bn and $1.5bn respectively through the Bureau of Public Enterprises (BPE).
It is understood that the privatisation fetched about $3.2bn for the Federal Government.
The Federal Government officially privatised the six successor power generation companies and 11 distribution firms that were unbundled from the defunct Power Holding Company of Nigeria.
The acquisitions by the core investors were financed mostly by debts, a significant portion of which was provided by local banks.
It is said 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 showed that all was not well with the Discos.
In July this year, it was reported that the Federal Government alongside Fidelity Bank and AMCON had taken over the affairs of five DISCOs over debts owed to Fidelity Bank.
The affected companies were Kano Electricity Distribution Company, Ibadan Electricity Distribution Company, Benin Electricity Distribution Company, Kaduna Electric, and Port Harcourt Electricity Distribution Company.
The companies had failed to repay loans obtained to pay for assets acquired in the 2013 privatisation exercise.
Also, the government, through its BPE, announced that with the takeover of Ibadan Disco by AMCON, the BPE had obtained approval from the Nigerian Electricity Regulatory Commission (NERC) to appoint an interim managing director for the distressed power firm.