The Yola Electricity Distribution Company (YEDC), which has been under the control of the Bureau of Public Enterprises (BPE) has finally gotten another private operator six years after the previous operator pulled out over revenue loss.
The Distribution Company (DisCo) is responsible for supplying electricity to consumers across the five states of the Northeast and has its head office in Yola, the Adamawa State capital.
According to BPE, the new investor, Quest Electricity won the bid and began the acquisition process in July 2021. Just two weeks ago, the handover process was completed at the BPE headquarters in Abuja by the directors of Quest Electricity.
This means Quest Electricity now controls 60 per cent shares of the DisCo while BPE retains 40% on behalf of the federal government.
They are the owners of Mainstream Energy Solutions Limited (MESL), the operators of the Kainji and Jebba hydropower plants in Niger State, mainly driven by the board Chairman, Col. Sani Bello (Rtd).
The promise of reforming the Yola Electricity Distribution Company (YEDC) came strong on 1st November 2013 when Integrated Energy Distribution and Marketing Company (IEDMC) acquired YEDC and Ibadan Electricity Distribution Company (IBEDC) for $160 million.
The two DisCo were among the 10 DisCos initially privatised in 2013 with Kaduna DisCo privatised in 2014.
Just two years after running the two DisCos, IEDMC pulled out of Yola DisCo by declaring a force majeure after citing the insurgency issue as affecting the business. It handed over YEDC to the federal government in 2015 and the DisCo has been under the control of the Bureau of Public Enterprises (BPE) until the resale process began in 2019.
In 2019, BPE noted that 19 firms had indicated interest to acquire the Afam Power Company and the YEDC, put up for sale by the federal government. While seven companies submitted Expression of Interest (EOIs) to buy Afam, 12 others indicated interest in Yola Disco.
By March, BPE announced that five investors scaled through the initial hurdles in submitting bids for the acquisition of the YEDC and Afam Electricity Generation Company (Genco) before the 15th March 2019 deadline for the submission of Technical and Financial Proposals for the two companies.
Specifically for YEDC, BPE stated that two firms applied for it. They are Quest Electricity Nigeria Limited and Sandstream Nigeria. While DiamondStripes Consortium, Unicorn Power Generation Consortium and Transcorp Power, sought to acquire the Afam Genco.
While Transcorp Power acquired Afam GenCo, Quest Electricity Nigeria Limited acquired Yola with a bid price of N19 billion, BPE said in July 2021.
In a statement by the Head, Public Communications at BPE, Amina Othman, the Share Sale and Purchase Agreement (SSPA) for the privatisation of YEDC was signed between BPE and the investor.
The Director General of BPE, Mr. Alex Okoh, in the statement further said in addition to paying the purchase fee of N19bn, the new investor – Quest Electricity has committed to a Performance Improvement Programme (PIP) with an investment of N28bn within two years.
The performance targets for the new operator of Yola DisCo include the reduction in Aggregate Technical, Commercial and Collection (ATC&C) losses from 80 per cent being the highest among the DisCos so far to 29%. This is an expected loss 51% reduction within the two years.
Quest Electricity is expected to grow the customer base from 396,650 to 596,650, which will be nearly 50% increase in customer base. It targets to also increase energy supply from 1,305 gigawatts hour (GWh) to 1,714GWh, representing about a 31% increase.
Chairman of Quest Electricity Nigeria Limited, Alhaji Adamu Mele, said there is insecurity in the company’s franchise area but that firm as its plans to transform the DisCo.
Presenting his position on the Yola DisCo transaction, the convener of PowerUpNigeria, Mr Adetayo Adegbemle, said the coming of Quest Electricity was a mark of bravery as for six years, no investor was interested in the DIsCo due to the insurgency in the north east.
“The Management of Mainstream (MESL) themselves are not new to the electricity industry, as they are presently the concessionaires of both Kanji and Shiroro Electric Power Dams, paying an annual fee of.
So, it must be said that their willingness to float Quest Electricity Nigeria Limited to invest in Yola DisCo for N19bn, with further Performance Improvement Programme investment of N28bn is definitely an uncommon business bravery in the face of security and economic hopelessness,” Adegbemle noted.
Source: Dailytrust
