June 19, 2024

West Power and Gas set to sell stake in Eko DisCo for $350 million


Adewale Akintaro

West Power and Gas Ltd (WPG), the core investor in Eko Distribution Company, is reportedly mulling selling its stake to raise $350 million and has contacted advisers to speed up the process.

Eko Disco, serving Lagos South and 8 million people, is a top performer in the power sector with a 10.22% loss rate in Q4 2023 and $177.5 billion revenue in 2023, making it an attractive investment opportunity.
The potential equity sale is to recapitalize Eko Disco ahead of sector reforms, drawing interest from renewable energy players and GENCOs seeking synergies, which experts believe could enhance the company’s financial and operational efficiency.
West Power and Gas Ltd, the core investor in Eko Distribution Company, is exploring a potential equity sale of its stake in the power distribution company.

The company according to insiders is looking to a capital raise and has engaged consultants and fundraisers to make the process seamless.

WPG reportedly paid $135 million to acquire 60% of the core assets of the distribution company from the government during the privatization of the electricity sector in 2013.

The government owns the balance of 40% of the equity in the distribution company.

Eko Disco, one of the eleven distribution companies licensed by the federal government, operates in the Lagos South franchise area, serving up to 8 million people.

The power distribution company has been one of the better performers in the sector, leading in terms of remittances to the market and loss reduction.

The company recently recorded an all-time low aggregate technical commercial and collection loss of about 10.22% in the fourth quarter of 2023, one of the lowest in the industry.

According to data from the National Bureau of Statistics, the company reported a revenue collected of N177.5 billion in 2023 and billed 3,448GWh of energy. Eko Disco collects about 85% of its billed revenue per regulatory data.

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