Transgrid Enerco Limited, a consortium of key players in Nigeria’s energy sector, has officially confirmed its acquisition of 60% equity stake in Eko Electricity Distribution Company (Eko DisCo) from West Power & Gas Limited (WPG). This milestone agreement was announced by Engineer Olubunmi Peters, Chairman of Transgrid Enerco Limited, during the signing of the Share Purchase Agreement (SPA) between the two entities.
The transaction, valued at over $200 million, is set to be finalized by April 2025, marking a transformative shift in the management and operations of Nigeria’s second-largest power distribution company.
Key Details of the Acquisition
Engineer Olubunmi Peters, while addressing stakeholders on Tuesday, described the acquisition as a crucial step toward innovation, sustainability, and community-focused solutions within Nigeria’s power sector.
“With this agreement, we are not just acquiring 60% of Eko Electricity Distribution Company but also embracing the responsibility to deliver reliable electricity, modernize infrastructure, and contribute to Nigeria’s economic growth,” Peters stated.
The Eko DisCo service area, which includes Lagos State and the Agbara community in Ogun State, plays a pivotal role in the nation’s commercial and industrial activities. Peters revealed plans to increase Eko DisCo’s capacity from 513MW to 1,500MW in the coming years through strategic investments, operational improvements, and innovative technologies.
Consortium Partners and Strategic Vision
Transgrid Enerco Limited is a consortium comprising:
1.North-South Power (NSP): One of Nigeria’s largest electricity generation companies.
2.Axxela Limited: A key natural gas distributor in Nigeria with embedded power projects already supporting Eko and Ikeja DisCos.
3.Stanbic IBTC Infrastructure Growth Fund: Established in 2021 with a ₦100 billion Shelf Programme focused on infrastructure investments with strong cash flow prospects.
The collaboration among these partners, according to Peters, reflects a shared vision to enhance Eko DisCo’s performance and profitability while ensuring adherence to the regulatory framework of Nigeria’s electricity sector.
Insights into Eko DisCo’s Legacy
West Power & Gas Limited has been credited with transforming Eko DisCo into one of Nigeria’s top-performing power distribution companies since its acquisition during the 2013 privatization program. Engineer Peters acknowledged WPG’s role in making Eko DisCo a commercially viable and stable entity, which paved the way for this historic acquisition.
“This is the first market-driven acquisition of a power distribution company in Nigeria,” Peters noted, adding that the transaction demonstrates growing confidence in the country’s electricity market.
Financial Details and Future Plans
The acquisition process began with Transgrid paying a 10% commitment fee, meeting one of the initial conditions for the transaction. Upon completion in April 2025, Eko DisCo’s ownership will include a blend of upstream and midstream players, solidifying its position as one of Nigeria’s largest integrated electricity distribution companies.
Transgrid’s plans include:
•Expanding Capacity: Aiming to boost electricity supply from 513MW to 1,500MW.
•Operational Excellence: Introducing modern infrastructure and innovative solutions to improve service delivery.
•Regulatory Compliance: Working closely with stakeholders and regulators to maintain market discipline, transparency, and accountability.
For North-South Power (NSP), the acquisition ensures greater operational control and access to cash flow distribution, addressing challenges such as remittance obligations faced by other DisCos. Meanwhile, Axxela Limited is set to strengthen its existing power projects, which currently provide 100MW to Eko DisCo and 40MW to Ikeja DisCo.
Broader Implications for Nigeria’s Power Sector
The acquisition reflects a growing trend of bilateral contracts between distribution and generation companies, offering incentives for power producers to invest in DisCos. This model is expected to enhance efficiency and service delivery across Nigeria’s electricity market.
The Stanbic IBTC Infrastructure Growth Fund, a key partner in the consortium, has positioned itself as a significant player in financing infrastructure projects, targeting periodic returns for investors while supporting the growth of the power sector.
As the final purchase consideration hinges on fulfilling all conditions precedent, the acquisition signals a new era for Eko DisCo, promising improved electricity distribution and economic growth in Lagos and Ogun States. Under the leadership of Engineer Olubunmi Peters and the Transgrid consortium, the transaction is set to redefine the dynamics of Nigeria’s electricity distribution sector, ushering in a period of innovation and sustainability.
