Nigeria to sell power distribution firm over $130 million debt
The sixth largest power distribution utility in Nigeria has been put up for sale by the country’s electricity regulator over a $130 million debt.
Image for illustration purposes.
Nigeria, Lagos: The sixth largest power distribution utility in Nigeria has been put up for sale by the country’s electricity regulator over a $130 million debt.
This happens less than two years after the lenders who took over the company failed to turn it around and make it profitable. Nigeria, which is Africa’s biggest economy, has 11 power distribution companies, however, they are struggling to remain profitable due to a of lack of capital and sub-economic tariffs imposed by the Nigerian Electricity Regulatory Commission (NERC).
Kaduna Electricity Distribution Plc (Kaduna Electric) is one of 18 successor companies created following the privatisation of the defunct Power Holding Company of Nigeria in 2013. It sells electricity in four northern states. The utility owes 110 billion naira ($130 million) to companies including the Nigerian Bulk Electricity Trader and power generation firms. The company is now considered a ‘failing licensee’ by the regulator, allowing NERC to dissolve its board using a law passed last year.
Kaduna Electric was taken over by African Export-Import Bank (Afreximbank) and local lender Fidelity Bank in July 2022, however, they have struggled to improve its financial performance. The Nigerian government owns a 40% stake through its Bureau of Public Enterprises. NERC has appointed an administrator and special directors to manage the company in the interim and sell its assets to the highest bidder.
Source: Economic Times Energy World
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