Transgrid Enerco Limited will take over Nigeria’s second-largest electricity distribution company, Eko Electricity Distribution Company (Eko Disco), after completing a 60 per cent equity stake acquisition.
Transgrid is a consortium which includes North South Power Company Limited (NSP), Axxela Limited, and the Stanbic IBTC Infrastructure Growth Fund (SIIF).
The share purchase agreement (SPA) for the proposed acquisition was signed on Tuesday, January 21, 2025, and the transaction will be completed in April 2025.
Earlier this month, West Power and Gas Ltd (WPG), the parent company of Eko DisCo, was reportedly close to selling its entire stake after the North-South Power, Axxela, and Stanbic Infrastructure Fund consortium won the bid to acquire it.
The monetary term of the deal was not disclosed but industry experts say it is over $200 million.
The play is a positive for the consortium as NSP and Axxela Limited are in the energy sector and Stanbic IBTC is making increased play to diversify its businesses.
NSP which owns Shiroro Dam will get direct control and insight into EKEDC’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.
This could also influence other Discos to employ more efficient payment collection tactics.
This extends the recent trend of electricity-generating companies buying distribution companies after a Transcorp-led Consortium, which owns the Ughelli Power Plant, acquired a 60 per cent majority stake in Abuja Disco in 2023.