A fresh controversy is brewing over the proposed $62 million sale of a 60 per cent equity stake in the Ibadan Electricity Distribution Company (IBEDC), following a lawsuit filed by a civil society organisation, African Initiative Against Abuse of Public Trust, which described the transaction as undervalued and lacking transparency.

The lawsuit, instituted before a Federal High Court, also comes at a time the Federal Government has announced a pilot reform to overhaul two underperforming electricity distribution companies (DisCos) as part of a broader effort to reposition Nigeria’s ailing power distribution sector.

In the suit, the group alleges that the stake, originally sold for $169 million in 2013, is now being secretly offered for just $62 million (approximately N100 billion), resulting in a potential loss of $107 million in public value. The Asset Management Corporation of Nigeria (AMCON), which currently holds the stake following a receivership process, is named as the primary defendant, alongside the Bureau of Public Enterprises (BPE), the Nigerian Electricity Regulatory Commission (NERC), and IBEDC.

Led by Chibuzor C. Ezike and seven other lawyers, the group is seeking to stop what it calls an “illegal, secretive and grossly undervalued” transaction, urging the court to declare that AMCON, holding the shares in public trust, lacks the authority to dispose of them below their original value.

Tracing the history of IBEDC’s ownership, the plaintiff recalled that the 60 per cent equity stake was originally sold to Integrated Energy Distribution and Marketing Company Limited in 2013 for $169 million. However, following a loan default, AMCON took over the stake via a receivership process, having acquired the non-performing loan from Polaris Bank (formerly Skye Bank).

Confirming the development, IBEDC’s spokesperson, Angela Olanrewaju, acknowledged the proposed sale and the pending suit, but told *The Guardian* that AMCON and BPE were in a better position to speak on the matter.

In a similar vein, NERC confirmed awareness of the development and also redirected all inquiries to AMCON and BPE. However, a source within the Commission who spoke with The Guardian questioned the basis of the legal action.

“If the group said the amount is X, maybe X trillion or whatever it is, did they offer to buy the asset at that price and take over the DisCo? It’s as simple as that. From my understanding, they’re disputing the amount AMCON intends to sell. I think there’s a bit of ambiguity in the answer to that question. As for the litigation, I don’t know if our legal team at the Commission has received the court summons yet.”

Speaking exclusively to *The Guardian*, Director of Energy Department at BPE, Amaechi Aloke, clarified the Bureau’s role, noting that it’s not in charge of the sale.

“These are shares that belonged to the core investor, which have now been taken over on behalf of the lenders. AMCON has its own powers under its law. We are just like NERC—it’s not our shares. People sue anyone in sight when they go to court. Even if they sue us, we have no one-on-one control of those shares. AMCON is in a better position to explain the process and their actions,” he said.

Aloke further stated that the commercial terms of the sale are outside BPE’s mandate as the shares are lenders’ shares, not theirs, noting that AMCON has its governance process for such transactions. If it were BPE, it would go through a full valuation and approval procedure. But in this case, it’s not a BPE matter at all.

Meanwhile, Minister of Power, Chief Adebayo Adelabu, has unveiled a pilot initiative to restructure two non-performing DisCos, one each in the North and South, as part of a roadmap jointly developed with the Japanese International Cooperation Agency (JICA). The reform, expected to kick off between May and August 2024, aims to overhaul governance, infrastructure, and commercial operations.

“We can no longer fold our hands and watch the inadequacies of DisCos whose performance falls short of expectations. This pilot is not optional. We will use regulatory authority to restructure underperforming DisCos and compel compliance if necessary,” he said.

Adelabu stressed that key to the initiative is resolving the DisCos’ inability to invest in infrastructure upgrades, noting that their lack of investment is not solely due to unwillingness but also lack of incentives. He, however, directed NERC to enforce franchising opportunities and ensure DisCos’ cooperation.

“NERC must secure their buy-in. Past efforts failed due to resistance, but this time, we will be intentional and decisive,” he said.

The pilot will serve as a template for wider reforms and will integrate technical expertise, enforce franchising, and focus on immediate results. Adelabu stressed that public education is vital to help Nigerians understand the distinct roles of generation, transmission, and distribution firms.

All efforts by The Guardian to reach AMCON’s spokesperson, Jude Nwauzor, for official comments were unsuccessful, as calls and messages were not returned at press time.