EKEDC Proposed Purchase and a New Era in Nigeria’s Power Sector

In January 2025, West Power and Gas the parent company of Eko Electricity Distribution Company (EKEDC), indicated interest to sell off the majority of its stake in EKEDC. Officially, the goal was to attract fresh capital, technology, and expertise to enhance EKEDC’s network and improve its service delivery. However, some key industry commentators viewed the move as strategic, given the competitive landscape expected to emerge with the enacting of the Lagos State Electricity Law.

Through a public bidding process, Transgrid Enerco Limited a consortium comprising Stanbic IBTC Infrastructure Growth Fund (SIIF), North-South Power Company Limited (NSP), and Axxela Limited secured the acquisition of a 60% stake. This marks the first market driven acquisition in Nigeria’s power sector, a significant milestone pointing towards increased investor confidence and power sector maturity.

Although the Share Purchase Agreement (SPA) was signed on January 21, 2025 and scheduled for completion by April (pending regulatory approval), this is October, no official/public confirmation of closure has been issued.

Still, one thing is clear, the Nigeria’s electricity market is evolving, policy frameworks are being strengthened, investors are watching closely, and opportunities abound across generation, transmission, distribution, system operations, and renewables.

What states must prioritize moving forward:

1. Avoid rushing into regulatory autonomy from NERC. First, establish a clear roadmap, study the market carefully, and appoint competent professionals to state electricity commissions.
2. Create investor friendly environments through tax incentives, land access, security guarantees, gas availability and other positive incentives.
3. Consider strategic state investments in distribution, transmission, or even generation, not only to accelerate the power sector growth but also to boost IGR.
4. Engage professional consultants for asset evaluation and sector planning as highlighted by Femi Otedola in his book “Making It Big”, during the 2013 DISCO privatization exercise he relied on expert consultants to assess all available power assets. Their evaluation advised him against acquiring Ikeja Electric (his initial target) and instead recommended Geregu Power a decision that proved highly strategic and commendable.
5. Gas producing states should explore setting up gas aggregating companies to leverage flared gas opportunities from the federal government (as we know that despite the gas being domiciled within the states, the control is exclusively within the powers of the federal government), process this gas for power generation and possibly sell to other power generating investors and within the state.
6. Treat the power sector as a serious business: appointments should be based on competence, not politics, to ensure credible regulation and effective operations.
7. Prioritize host community engagement and CSR, avoiding mistakes from the oil and gas sector that created tension and disruptions.

The power sector remains one of Nigeria’s biggest opportunities, if properly structured, it can boost IGR, generate employment, strengthen local industries, and improve livelihoods.

The journey is challenging, but as momentum builds, there’s reason to believe that indeed there will be light at the end of the tunnel.