January 21, 2025 – Lagos, Nigeria
Eko Electricity Distribution Company (Eko DisCo), Nigeria’s second-largest electricity distributor, has entered into a landmark deal, selling a 60% equity stake to Transgrid Enerco Limited. The agreement was formalized today, with the transaction expected to be completed by April 2025.
Transgrid Enerco is a consortium comprising North South Power Company Limited (NSP), Axxela Limited, and the Stanbic IBTC Infrastructure Growth Fund (SIIF). This move follows reports earlier this month that West Power and Gas Ltd (WPG), the parent company of Eko DisCo, had reached a deal with the consortium to sell its entire stake.
The deal, which has been in the works for over a year, is poised to reshape the dynamics of Nigeria’s power sector. While the financial details of the transaction remain undisclosed, it is believed to be worth a significant sum, reflecting the strategic importance of the acquisition.
Strategic Synergies and Industry Impact
The acquisition brings together key players in Nigeria’s energy sector. North South Power (NSP), which owns the Shiroro Dam, will now have direct control over Eko DisCo’s operations. This integration is expected to provide greater visibility into the company’s cash flow and payment collections, addressing ongoing issues that have plagued the industry.
NSP has faced challenges in receiving full payments from power-generating companies, as many distribution companies (DisCos) struggle to meet their remittance obligations. With this new acquisition, NSP aims to streamline the payment process and potentially set an industry benchmark for more efficient collections across other DisCos.
The synergy between NSP and Eko DisCo echoes previous acquisitions in the sector. In 2023, a Transcorp-led consortium, owners of the Ughelli Power Plant, acquired a 60% majority stake in Abuja DisCo. Similarly, Sahara Power, which owns the Egbin Power Plant, holds a 60% stake in Ikeja Electric.
Future Prospects for Eko DisCo
With the transfer of ownership, the new stakeholders in Eko DisCo are poised to leverage the rapidly evolving Nigerian electricity market. Charles Momoh, Chairman of WPG, expressed optimism about the future of Eko DisCo under the new leadership. “Transgrid Enerco will, upon obtaining the relevant regulatory approvals, capitalize on the positive changes occurring within the fast-evolving Nigerian electricity market to reposition Eko DisCo to access new sources of capital,” Momoh stated.
While the deal signals progress for the sector, it remains to be seen if the new ownership will address the persistent challenges facing electricity distribution in Nigeria. However, the involvement of established energy companies like NSP and Axxela suggests that the acquisition could pave the way for much-needed reforms.
Looking Ahead
As Nigeria continues to grapple with electricity supply and distribution challenges, the increasing involvement of energy-generating companies in distribution is becoming a growing trend. The deal also highlights the potential for renewable energy and mini-grid solutions, offering new opportunities for innovation and growth within the sector.
This acquisition is expected to play a significant role in shaping the future of Nigeria’s electricity market, offering hope for improved efficiency, better payment structures, and greater access to capital in the years to come.
For more updates on this developing story, stay tuned to our news section.
About Eko DisCo:
Eko Electricity Distribution Company is one of the largest power distribution companies in Nigeria, serving Lagos and its surrounding areas. It is committed to improving electricity supply and service delivery to millions of customers in the region.
About Transgrid Enerco:
Transgrid Enerco is a joint venture formed by North South Power, Axxela Limited, and Stanbic IBTC Infrastructure Growth Fund, focused on energy infrastructure development and innovation across the Nigerian power sector.
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