Inside FG’s Bold Plan: Power Assets Coming to NGX

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Olori Uwem

Well-Known Member
Mar 18, 2024
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⚡ Inside FG’s Bold Plan: Power Assets Coming to NGX

The Federal Government (FG) has revealed an ambitious plan to list two electricity distribution companies (DisCos) and one generation company (GenCo) on the Nigerian Exchange (NGX). This move could reshape both the power sector and the capital market.

The Big Picture
• Who’s in charge? The Bureau of Public Enterprises (BPE), led by DG Ayodeji Gbeleyi.

• Which assets? Two of the best-performing DisCos (one from the South, one from the North, likely Abuja) and one GenCo.

• Why now? To boost governance, transparency, and attract long-term capital before the 2027 elections.

Selection Criteria

FG insists this isn’t about dumping underperforming assets on investors. Only financially strong and operationally efficient companies will make the cut.

A key factor? The Band A tariff regime, which allows DisCos to charge higher tariffs in exchange for more reliable supply. Those who adapted quickly are now profitable — making them attractive for listing.

FG’s Objectives
1. Improve Governance – Public listing means stricter accountability and market discipline.

2. Enhance Capital Access – Utilities can raise funds for infrastructure upgrades.

3. Democratize Ownership – Ordinary Nigerians can finally own shares in privatised power companies.

⚖️ Challenges Ahead
• Equity Complications: Many state governments still own stakes in these assets. The NEC and BPE must resolve ownership questions first.

• Timeline Pressure: Listings must conclude before 2027 elections — a tight window.

• Transparency & Valuation: Investors will only participate if valuations are credible and governance frameworks are solid.

Global Context
• India: Power giants like NTPC, Tata Power, and Adani Power are listed, boosting sector growth to a $260bn market cap.

• China: Power assets worth nearly $400bn are listed, including renewables and nuclear power companies.

Nigeria wants to replicate this model to deepen NGX participation and attract global investors.

Why This Matters for Investors
• Opens up a new sector on the NGX beyond banks, oil, and telecoms.

• Opportunity to invest in essential infrastructure — electricity powers every industry.

• Could stabilize and modernize DisCos/GenCos by attracting fresh capital and enforcing accountability.