When the Federal Government formally handed over power distribution to private investors in 2013, many observers predicted it would fail.
Their concern arose from the fact that those who invested in the project borrowed most of the acquisition funds from commercial banks to finance the purchase.
12 years down the line, however, the Ibadan Electricity Distribution Plc has proven them wrong to become a lesson in operational success.
Before 2013, the Nigerian Electricity Supply Industry, NESI, which oversaw the entire value chain, from generation to transmission and distribution, faced numerous problems such as infrastructure challenges and unreliability in customer satisfaction.
In an attempt to restructure the sector, optimise performance and attract private capital, federal government gave distribution rights to the Benin Electricity Distribution Plc, Eko Electricity Distribution Plc, Enugu Electricity Distribution Plc, Ibadan Electricity Distribution Plc, Ikeja Electricity Distribution Plc, Jos Electricity Distribution Plc, Kaduna Electricity Distribution Plc, Kano Electricity Distribution Plc, Port Harcourt Electricity Distribution Plc and Yola Electricity Distribution Plc.
Yet, it was not everyone who believed the reforms that would be anchored by these private owners would work, and the reasons given could not be overlooked.
By way of explanation, a one-time Chairman of the Nigerian Electricity Regulatory Commission, NERC, Dr Sam Amadi, who subscribed to that school of thought, argued that the use of short-term borrowing to execute projects with long-term returns was a mistake made by the Discos.
On several occasions, he posited that it was wrong for the investors who bought over the assets to borrow from commercial banks that would make demands for their funds in a short time.
The lawyer said moving to a full private sector market in utilities like electricity in a state of acute scarcity in one fell swoop was a miscalculation.
He said: “This is the singular mistake Nigeria made. We should have fully commercialised and corporatised our electricity sector under effective regulation. Privatisation would have come down the line when the sector would have gained efficiency through effective regulation and good corporate governance.
“We erred by privatising so quickly when we were yet to set up a proper regime of corporate governance and when we are suffering from gross incapacity.”
Describing it as a modelling error, he maintained that sighting power plants far from the gas supply sources, resulting in high cost of transmitting across a large expanse, was adding to overall costs.
But today, IBEDC is a powerful example of resilience, strategic leadership, and transformation within Nigeria’s challenged power sector.
Read also: IBEDC grows assets to N685bn as revenue collection hits N22bn
This is despite inheriting decades of systemic inefficiencies such as dilapidated infrastructure, a poorly metered customer base, erratic load allocation, tariff deficits, billing inefficiencies, meter bypassing, staff-customer collusion, and weak revenue collection, macroeconomic pressures, policy volatility, inflation and shifting regulatory frameworks.
As the largest electricity distribution company in Nigeria serving Oyo, Ogun, Osun, Kwara, and parts of Niger, Ekiti and Kogi states, IBEDC’s evolution from chronic underperformance to being named Nigeria’s most improved distribution company reflects a bold and focused reform agenda that is unparalleled.
Since July 2022 when the new Board and Management came to office, the company has embarked on critical reforms that have been instrumental in recent successes.
Notably, IBEDC’s efforts during this period led to it being widely regarded, within the industry, as Nigeria’s most improved distribution company, underscoring its successful turnaround and commitment to excellence.
This progress is largely attributed to the strategic leadership of the Managing Director/CEO, Engr. Francis Agoha, ably supported by the Board. Since assuming office on May 31, 2024, the MD/CEO has not only sustained past gains but significantly recalibrated internal systems to deliver sustainable results. As a testament to the ongoing revival championed by the current leadership, IBEDC has successfully transitioned from a loss-making entity to a profitable enterprise.
According to its 2021 Audited Financial Statement, the company reported a Loss After Tax of N62.89 billion, with total assets exceeding ₦557 billion. In 2022, the Loss After Tax reduced significantly to ₦17.90 billion. The 2023 audited financial report conducted again by reputable audit firm, Ernst & Young, EY, showed positive indications the company’s fortunes have dramatically improved from loss making to profit. Profit after tax was over N8.9 billion while total assets grew to over N685 billion.
The company’s fortunes have dramatically improved from loss making to profit. Profit after tax was over N8.9 billion while total assets grew to over ₦685 billion.
Read also: IBEDC dialogues with 18,000 communities, customers to address concerns
Financial discipline as the foundation for growth
At the heart of IBEDC’s transformation is a strong commitment to financial discipline. Since November 2024, the company has consistently maintained a 100 per cent market remittance rate, an exceptional achievement in a sector long plagued by liquidity issues and payment defaults. This fiscal prudence has significantly enhanced IBEDC’s credibility with key stakeholders, including the Nigerian Bulk Electricity Trading (NBET) Plc, Market Operator, Transmission Company of Nigeria (TCN), and power Generation Companies (GenCos), while also restoring investor and regulatory confidence.
Under the current leadership, IBEDC’s monthly revenue collection more than doubled from an average of N10 billion to consistently above ₦20 billion since December 2024. In February 2025, the company hit an all-time high monthly collection of N22.028 billion, following a N21.985 billion collection milestone in October 2024. Furthermore, IBEDC recorded its best Non-Maximum Demand (Non-MD) collection of N7.634 billion in January 2025.
Agoha, through his strategic leadership and the guidance of the board, have brought about a renewed emphasis on customer care, performance and accountability.
For what he and IBEDC have done despite initial hurdles, they deserve to be praised.
.Abiodun, an economist, sent this piece from Abeokuta.
