…2 DisCos, GenCo set for IPOs as govt seeks fresh capital, transparency
The Federal Government is preparing to unlock a new phase in Nigeria’s troubled electricity sector with plans to list two electricity Distribution Companies (DisCos) and one Generation Company (GenCo) on the Nigerian Exchange Limited (NGX) through an Initial Public Offering (IPO).
Director-General of the Bureau of Public Enterprises (BPE), Ayodeji Gbeleyi, disclosed the move at a media briefing yesterday, describing it as a strategic step to deepen private sector participation, attract long-term capital, and instill stronger governance practices in the power sector.
“This is not just about selling shares; it is about creating an opportunity for Nigerians to directly own a stake in the electricity industry,” Gbeleyi said. He declined, however, to name the firms to be listed, citing corporate confidentiality.
The planned flotation comes at a time when Nigeria’s power sector is grappling with weak distribution networks, liquidity shortfalls, and underinvestment that continue to frustrate consumers and investors alike. Gbeleyi revealed that shareholders’ loan agreements have recently been signed for 10 of the 11 DisCos, with disbursements expected to commence soon—a move he described as critical to stabilizing the firms’ operations.
On the generation side, he admitted that privatization of five GenCos has stalled due to exchange-rate volatility, inflationary pressures, and persistent transmission bottlenecks that prevent efficient evacuation of generated power.
The BPE chief also weighed in on Nigeria’s moribund refineries, stressing that the conversation should move beyond whether to privatize and instead focus on how to reposition the assets to deliver value and halt perennial financial losses.
Analysts say listing the power companies could mark a turning point, offering transparency and accountability that have eluded the sector since its partial privatization in 2013.
Publicly traded DisCos and GenCos, they argue, would face stronger investor scrutiny, compelling them to improve efficiency and service delivery. Yet, the initiative comes against a backdrop of mounting frustration with distribution companies. The Minister of Power, Adebayo Adelabu, recently castigated the DisCos for what he described as persistent underperformance that undermines government efforts to improve electricity supply.
Speaking at a Senate Committee retreat in May, Adelabu noted that despite tariff adjustments that boosted sector liquidity by 70 percent— raising revenues from N1 trillion in 2023 to N1.7 trillion in 2024—the distribution segment remains the “weakest link” in the value chain. He accused some DisCos of prioritizing loan repayments over investment in infrastructure, leaving consumers trapped in darkness amid frequent outages and estimated billing.
The Minister warned that the sector’s financial fragility is worsening, with a subsidy backlog of N4 trillion owed to GenCos, including nearly N2 trillion for 2024 alone. Monthly subsidy shortfalls have now surged to N200 billion, a burden he described as “unsustainable” for public finances.
