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FG To Handover Power Distribution To States

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In a move to tackle the enduring power shortages across Nigeria, the government is considering handing over power distribution of the 11 power distribution companies (DISCOs) to state governments.

Minister of Power Adebayo Adelabu revealed this strategy in a tweet last Friday, outlining a bold plan to address the country’s longstanding electricity woes.

“The federal government is considering an equity swap, trading shares in DISCOs for stakes in the Niger Delta Power Holding Co,” Adelabu stated, emphasizing the intent to enhance state involvement and efficiency in power distribution.

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The proposal includes the possibility of unbundling regional DISCOs, allowing more localized oversight by different states. Adelabu highlighted the government’s commitment to working closely with state ministries of power to tackle challenges in the distribution segment.

President Bola Tinubu’s signing of the Electricity Act, granting more regulatory power to states in the sector, marks a shift from the prior centralized control by the federal government.

However, this move has raised concerns among investors about states’ capacities to effectively regulate the sector.

This shift in ownership, seen as a step toward decentralization, aims to bridge the gap between Nigeria’s installed power generation capacity and the actual power distributed, which currently leaves millions reliant on generators for electricity.

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While promising a potential solution to the country’s energy crisis, it’s poised to reshape the landscape of power utility ownership and management in Nigeria.

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