In a significant move aimed at reshaping Nigeria’s electricity distribution landscape, Transgrid Enerco Limited has signed a share purchase agreement (SPA) to acquire a 60% equity stake in Eko Electricity Distribution Company (Eko DisCo). The transaction, finalized yesterday, January 21 2025, is set for completion by April 2025.
This acquisition marks a crucial milestone in Nigeria’s power sector, with Transgrid Enerco—comprising North South Power Company Limited (NSP), Axxela Limited, and the Stanbic IBTC Infrastructure Growth Fund (SIIF)—positioning itself to take a leading role in the country’s electricity distribution. Reports suggest that West Power and Gas Ltd (WPG) initiated the sale of its entire stake in Eko DisCo over a year ago. The consortium, led by Transgrid Enerco, emerged as the winning bidder, with the deal reportedly exceeding $200 million.
As two of the consortium’s members, NSP and Axxela Limited bring extensive expertise in the energy sector. NSP, which operates the Shiroro Dam, will gain critical insights and operational oversight of Eko DisCo’s cash flow and payment collection systems.
One of the key issues in Nigeria’s power sector has been the inability of some electricity distribution companies (DisCos) to meet their remittance obligations. While Eko DisCo has largely fulfilled its obligations, NSP’s involvement in the consortium is expected to enhance payment collection efficiencies. By improving cash flow management, NSP may also set a benchmark for other DisCos to adopt more effective payment practices.
The acquisition mirrors similar moves in the industry. For instance, in 2023, the Transcorp-led consortium, owners of the Ughelli Power Plant, acquired a 60% majority stake in Abuja DisCo. Likewise, Sahara Power, which owns the Egbin Power Plant, holds a controlling stake in Ikeja Electric. With this acquisition, Transgrid Enerco aims to address the ongoing challenges in Nigeria’s electricity distribution. According to Charles Momoh, Chairman of WPG, the consortium plans to leverage the evolving electricity market to reposition Eko DisCo and attract new sources of capital. “We believe this acquisition will capitalize on the positive changes occurring within Nigeria’s electricity market to enhance Eko DisCo’s operational capabilities and financial sustainability,” Momoh said in a press statement.
As Nigeria continues to face persistent electricity challenges, the demand for renewable energy and mini-grid solutions has surged. These alternative energy sources are becoming critical in addressing the country’s energy deficit, presenting opportunities for innovative startups to make a meaningful impact. With the completion of this acquisition in sight, all eyes will be on Transgrid Enerco and its ability to transform Eko DisCo into a model for efficiency and reliability in Nigeria’s power sector.
