BusinessFour States Seek Shareholder Rights in Benin Disco

Four States Seek Shareholder Rights in Benin Disco

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March 24, (THEWILL)- The state governments noted that the decision is to ensure the efficient provision of electricity services to citizens.

This was disclosed in a letter dated 18 March, addressed to the Executive Chairman of NERC, Sanusi Garba.

The letter was jointly signed by the Commissioner for Energy in Delta State, Jerry Ehiwairor; the Commissioner for Mining and Energy in Edo State, Enaholo Ojeifoh; the Commissioner for Infrastructure and Public Utilities in Ekiti State, Mobolaji Aluko; and the Commissioner for Energy and Mineral Resources in Ondo State, Razaq Obe.

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The officials signed the letter on behalf of the state governments.

The letter titled ‘Notification of intent to exercise shareholder rights in the Benin Electricity Distribution Company (BEDC)’ was also sent to the Minister of Power, Adebayo Adelabu, Shamsuddeen Usman, Chairman, Ministry of Finance Incorporated (MOFI), Director General, Nigeria Governors Forum, Chairman, Senate Committee on Power and Chairman, House of Representatives Committee on Power.

“We write to formally inform the NERC (the “Commission”) of the intent of the governments of Delta State, Edo State, Ekiti State and Ondo State (the “BEDC State Governments”) regarding our collective residual equity in the Benin Electricity Distribution Company (BEDC).

“After a thorough evaluation of the operational deficiencies and service delivery failures to our states, the BEDC state governments intend to exercise our shareholder rights in BEDC, to ensure the efficient provision of electricity services to our citizens,” the letter reads in part.

The state governments said the provision of reliable electricity to enhance the welfare and development of people is a core priority of the government.

“As such, we cannot afford to overlook the critical importance of ensuring that electricity distribution services provided by BEDC meet the needs and expectations of our populace henceforth,” the letter reads.

The state governments explained that in exercising their shareholder rights, they intend to actively participate in the decision-making processes of BEDC both at the board and management level of the company, to strengthen operations of the company and enhance service delivery, improve operational efficiency, increase electricity access to unserved and underserved communities, and ultimately, transform the electricity sector within the states.

“Please note that our demand is not capricious and merely wishes to correct a historical lapse. We wish to emphasize that at no point did the BEDC State government give any Power of Attorney (PoA) to either the Federal Ministry of Finance Incorporated (MOF) or the Bureau of Public Enterprises (BPE) with respect to our shareholding in the PHCN successor Benin Electricity Distribution Company, or the post-privatized entity.

“It has come to our notice that the commission intends to exercise a regulatory takeover of BEDC by March 31, 2024. The commission is kindly requested to formally notify the BEDC State governments before taking any regulatory action to appoint new directors and a management team for the company.

“We also urge the commission to immediately commence the process of unbundling BEDC into its operational areas along state boundaries,” it said.

The state governments further assured the commission of their support and cooperation in exercising any regulatory action against BEDC and its core investor, provided their rights as shareholders in the company are not breached.

Lastly, the state governments requested a meeting with the commission to discuss its intention as outlined in the letter in order “to exercise our rights in the company with a view to working out how these rights will be exercised under the commission’s regulatory oversight and for the benefit of all stakeholders involved.”

President Bola Tinubu had in June 2023 assented to the electricity bill, which authorizes states, companies and individuals to generate, transmit and distribute electricity.

The new electricity law repeals the Electric Power Sector Reform Act (EPSRA) which was signed by President Olusegun Obasanjo in 2005

The EPSRA (2005) provided the legal, regulatory and governance frameworks underpinning the Nigerian Electricity Supply Industry (NESI).

The new Act signed by Mr Tinubu consolidates all legislations dealing with the electricity supply industry to provide an omnibus and ideal institutional framework to guide the post-privatization phase of the Nigerian Electricity Supply Industry and encourage private sector investments in the industry.

It also provides a framework for the improvement of access to electricity in rural, unserved, underserved, peri-urban and urban areas through the use of conventional sources and renewable energy off-grid and mini-grid solutions.

With the new law, states would be able to issue licenses to private investors who can operate mini-grids and power plants but such state licenses are not to extend to inter-state or transnational distribution of electricity.

About the Author

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Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.

Sam Diala, THEWILLhttps://thewillnews.com
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.

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