The transaction, valued at over $200 million, is being facilitated by North-South Power, Axxela, and Stanbic Infrastructure Fund. 

The consortium has already paid an initial 10% commitment fee, with the deal set to conclude in early 2025.

This acquisition combines the expertise of upstream and midstream companies expected to create one of the most integrated electricity distribution firms in the country. 

North-South Power, the owner of Shiroro Dam, sees this as an opportunity to directly oversee Eko DisCo’s operations, which could address issues such as cash flow distribution.

For Axxela, a company doing great in Nigeria’s gas industry, the acquisition is strategic. The company aims to strengthen its presence in the distribution sector, which would allow it to gain direct access to revenue streams. 

Similarly, Stanbic Infrastructure Fund views the investment as a means to align with its goals of generating sustainable cash flow for its investors while supporting Nigeria’s critical infrastructure.

Eko DisCo, known for its operational efficiency, has consistently met its remittance obligations in the Nigerian electricity market. In 2023, the company reported revenue collections of ₦177.5 billion with an energy billing of 3,448 GWh, achieving a collection efficiency of approximately 85%. 

It also recorded an aggregate technical, commercial, and collection (ATC&C) loss of just 10.22%, one of the lowest in the industry.

The successful conclusion of this transaction could bring opportunities for recapitalisation and innovation in the country’s power market, thereby addressing long-standing challenges in the sector.

A letter signed by Dere Otubu, the company’s Chairman, made available to journalist has revealed.

The company explained that the decision was due to a directive from the industry regulator, NERC.

“We have received a directive from NERC stating that all staff working for the utility must be employed directly by the utility, bound by applicable service conditions that are applicable to the employees of the utility, and paid through the utility’s payroll.

“The Disco is obligated to comply with these directives due to the powers of NERC as stipulated in the Electricity Act 2023.

“In compliance with the aforementioned directive, all seconded staff from WPG Ltd are being released by Eko Electricity Distribution Plc and returned to WPG Ltd”.

Accordingly, you are hereby relieved of your role, office, and position at Eko Electricity Distribution Plc effectively immediately, and returned to your employer, WPG Ltd.”

According to the letter from NERC titled ‘Alleged Ghost Workers in Eko Electricity Distribution Company – Call For Investigation’, wherein it instructed the distribution company to “ensure all existing WPG secondees involved in the loss of revenue to EKEDC in this matter are withdrawn back to WPG,” indicating that all WPG staff seconded to Eko DisCo should be removed.

WPG is the core investor in Eko DisCo.

“It is important to note that, other executives in the company who were seconded from WPG were also affected by the directive”.

It was however gathered that the decision may have stemmed from internal management conflicts within the company over leadership positions.