- Edu Okeke called for a $250 million market capitalization for each Electricity Distribution Company in Nigeria to address financial struggles and debts
- The Power Correspondents Association workshop emphasized the need for decisive action to stabilize the electricity sector and improve investor confidence
Edu Okeke, Managing Director of Azura Power West Africa, has called for a $250 million market capitalization for each Electricity Distribution Company (DisCo) in Nigeria.
Speaking at the 4th edition of the Power Correspondents Association of Nigeria (PCAN) annual workshop in Abuja, Okeke highlighted the financial struggles of many DisCos, who face difficulties in paying their full bills to the power sector’s value chain.
The workshop, themed “Nigerian Power Sector: Ending the Talk, Moving to Action,” brought together industry stakeholders to discuss solutions to the country’s power challenges.
Okeke stressed that DisCos need proper capitalization to survive, pointing out that many are burdened by heavy debt. He emphasized that no DisCo should operate without at least $250 million in shareholder equity.
Okeke called on the Federal Government to take decisive action to address this issue and ensure the stability of the sector.
He explained, “For power sector investments to be viable, investors must be confident of cost recovery. There are two options: either the government subsidizes the cost, or consumers pay.
I commend the government’s decision to shift some costs to consumers, starting with Band A. But there’s a crucial weak link—the DisCos, who directly interact with consumers. Even with tariff adjustments, many are still unable to cover their full bills.”
He added that most DisCos have negative equity, leaving them with no financial stake in the sector. Okeke suggested that just as the Central Bank of Nigeria has raised capital requirements for banks to ensure their stability, the Nigerian Electricity Regulatory Commission (NERC) should set similar capitalization standards for DisCos.
Comrade Obas Esiedesa, Chairman of PCAN, also addressed the workshop, expressing concern over the sector’s slow progress despite ongoing discussions.
He noted that despite the implementation of the Service-Based Tariff and tariff hikes for Band A customers, progress in the power sector remains limited.
“Our concerns are heightened by the persistent issues in the sector, and we cannot stay silent,” Esiedesa said. “Today’s workshop is a call to action, aimed at finding practical solutions to move the sector forward.”
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