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A Lagos High Court has taken control of Ikeja Electric and KEPCO Energy Resources, two major players in the country’s power sector, adding to worries about the industry’s financial troubles.
KEPCO owns 70% of Egbin Power, Nigeria’s biggest electricity generator. The court’s decision comes as the sector faces a cash crisis estimated at 2 trillion naira ($1.31 billion).
Read also: Egbin Power, Ikeja Electric, dismiss receivership claims as false
Justice Akintayo Aluko ordered banks and regulators to freeze the companies’ assets and accounts and approved the appointment of Kunle Ogunba as Receiver/Manager, based on a 2013 agreement.
Six out of Nigeria’s 11 electricity distribution firms are now under receivership.
This raises concerns about the future of private investment in the sector, especially for upgrading the country’s creaking power grid and adding renewable energy.
Read also: Electricity Act Amendment Bill propose sale of 11 DisCos over capital failure
Many of the companies were bought using loans after the 2013 privatisation. Now, banks are focusing on recovering debts instead of lending more money.
The court’s move has sparked fresh debate about how Nigeria’s electricity market is set up, the role of government support, and whether private companies can still succeed in the sector.
