Eko DisCo sells 60% stake to Transgrid Enerco

Eko DisCo sells 60% stake to Transgrid Enerco

 

Transgrid Enerco Limited has signed a share purchase agreement (SPA) with Eko Electricity Distribution Company (Eko DisCO) to acquire a 60% equity stake in the DisCO, Nigeria’s second-largest electricity distribution company.

Transgrid Enerco Limited was formed by North South Power Company Limited (NSP), Axxela Limited, and the Stanbic IBTC Infrastructure Growth Fund (SIIF).

The agreement was signed on Tuesday January 21, 2025, and the transaction will be completed in April 2025.

Reports earlier this month indicated that West Power and Gas Ltd (WPG), the parent company of Eko DisCo, was close to selling its entire stake after the North-South Power, Axxela, and Stanbic Infrastructure Fund consortium won the bid to acquire it.

It was stated that the bid to acquire Eko Disco started a year ago. While the amount in the deal was not stated, it is believed to be in excess of $200 million according to this news report.

Two of the companies — NSP and Axxela Limited — that formed the Transgrid Enerco consortium are in the Energy sector.

The NSP which owns Shiroro Dam will get direct control and insight into Eko DisCo’s operations enabling it to have a clear scope of the company’s cash flow distribution.

While Eko Disco meets remittance obligations to the market, the inability of other DisCos to meet these obligations means that power-generating companies like NSP do not get their full payments.

This acquisition allows NSP to have better control of how the company collects payment and perhaps influence other DisCos to employ more efficient payment collection tactics.

A similar deal occurred in 2023 when a Transcorp-led consortium — owners of Ughelli Power Plant — acquired 60% majority stake in Abuja DisCo.