West Power and Gas Limited (WPG), the parent company of Eko Electricity Distribution Company (EKEDC), is close to selling its entire stake in the electricity company.
According to a recent report by Nairametrics, sources with direct knowledge of the transaction said a consortium that won the bid has paid the minimum 10 percent commitment fee.
The consortium comprises North-South Power (NSP), owners of Shiroro Dam; Stanbic Infrastructure Fund, and Axxela, a oil and gas company.
According to the sources, the consortium won the bid to acquire a stake in Eko Disco following a competitive process that began in early 2024.
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The parties are now in the conditions precedent phase, which requires a set of conditions to be met before the agreement can be finalised.
A source familiar with the transaction told the publication that NSP benefits from the acquisition because it gives the power generation company direct control and insight into the DisCo’s operations, allowing it to access cash flow.
The recent shift to bilateral contracts between distribution and generation companies, according to another source, offers power generation companies additional incentives to purchase DisCos.
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Citing examples, the publication said Transcorp Power, the owners of Ughelli Power Plant, holds a significant stake in Abuja DisCo, while Sahara Power, the owners of Egbin Power Plant, owns a majority stake in Ikeja Electric.
The report added that the deal is expected to close early in 2025, with a transaction size that could exceed $200 million while the final purchase consideration will be determined upon completion of the conditions precedent.
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