Eko DisCo, Nigeria’s second largest electricity distribution company, has sold 60% stake to Transgrid Enerco

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Transgrid Enerco Limited, formed by an alliance among North South Power Company Limited (NSP), Axxela Limited, and the Stanbic IBTC Infrastructure Growth Fund (SIIF), has signed a share purchase agreement (SPA) for the proposed acquisition of a 60% equity stake in Eko Electricity Distribution Company (Eko DisCO), Nigeria’s second-largest electricity distribution company.

The SPA was signed today, January 21, 2025, and the transaction will be completed in April 2025.

Reports earlier this month indicated that West Power and Gas Ltd (WPG), the parent company of Eko DisCo, was close to selling its entire stake after the North-South Power, Axxela, and Stanbic Infrastructure Fund consortium won the bid to acquire it.

It was stated that the bid to acquire Eko Disco started a year ago. While the amount in the deal was not stated, it is believed to be in excess of $200 million according to this news report.

This could be money well spent as two of the companies — NSP and Axxela Limited — that formed the Transgrid Enerco consortium are in the Energy sector.

NSP which owns Shiroro Dam will get direct control and insight into Eko DisCo’s operations enabling it to have a clear scope of the company’s cash flow distribution.

While Eko Disco meets remittance obligations to the market, the inability of other DisCos to meet these obligations means that power-generating companies like NSP do not get their full payments.

This acquisition allows NSP to have better control of how the company collects payment and perhaps influence other DisCos to employ more efficient payment collection tactics.

Interestingly, the acquisition of a DisCo by an electricity-generating company is not new. In 2023 a Transcorp-led Consortium — owners of Ughelli Power Plant — acquired 60% majority stake in Abuja DisCo.

Similarly, Sahara Power, — owners of Egbin Power Plant — owns a 60% majority stake in Ikeja Electric.

Moreover, the consortium acquiring Eko Disco is taking ownership from West Power and Gas Ltd (WPG). It remains to be seen if the new owners will solve the challenges facing electricity distribution in the country.

Chairman of WPG, Charles Momoh, said in a press statement seen by Techpoint Africa that “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.”

As Nigeria’s electricity problems continue to linger, it has opened up a market for startups creating renewable energy and mini-grid solutions.

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