North-South Power, Axxela, and Stanbic Infrastructure Fund Consortium wins bid to acquire majority stake in Eko DisCo

Reliable sources with direct knowledge of the transaction informed Naijaonpoint that a consortium that won the bid has paid the minimum 10% commitment fee.

The consortium comprises North-South Power (NSP), owners of Shiroro Dam; Stanbic Infrastructure Fund (the largest infrastructure fund in the country); and Axxela (one of Nigeria’s largest gas producers).

Naijaonpoint previously reported that a winner of the bid was close to being chosen for one of the most anticipated deals of the year.

According to our sources, the consortium won the bid to acquire the stake in Eko Disco after a competitive process that began earlier in 2024.

Following the successful bid, all parties are now in the conditions precedent phase, where a set of conditions must be met before the deal can be finalized.

Once completed, Eko DisCo’s new ownership will include a combination of upstream and midstream players, making it one of the largest integrated electricity distribution companies in Nigeria.

A source with knowledge of the transaction explained that for NSP, the acquisition provides the power generation company with direct control and insight into the DisCo’s operations, enabling it to access the company’s cash flow distribution.

Another source suggested that the recent move towards bilateral contracts between distribution and generation companies also provides added incentives for power generation companies to acquire DisCos.

Meanwhile, for Axxela, the acquisition is seen as strategic, as it helps the gas company expand into the distribution end of the market, giving it direct access to cash flow sources.

For Stanbic Infrastructure Fund, the deal offers Nigeria’s largest dedicated private equity fund for infrastructure a unique opportunity to invest in the country’s power sector.

The deal is expected to close early in 2025, with a transaction size that could exceed $200 million. Naijaonpoint also understands that the final purchase consideration will be determined upon completion of the conditions precedent.