Nigerian Banks Risk Collapse If Power Firms Fail - Discos
Electricity distribution companies have been embroiled in a spat with the federal government over the past few weeks.
Their performance since they took over ownership of Nigeria’s power firms is the bone of contention.
The power firms have even said they are willing to resell their companies at discounts if there are willing buyers, including the Power minister, Babatunde Fashola.
Now, they have come out to warn that should anything happen to their companies, most Nigerian banks will not survive it.
This is because the money used by the power sector investors to acquire the power assets were borrowed from the banks.
This ties the future of the banks to the success of the power firms.
They also stated that despite the problems in Nigeria’s power sector, the Minister of Power, Works and Housing, Babatunde Fashola, had not met with investors in the distribution arm of the industry since 2015.
Speaking during a live television programme, the Executive Director, Research and Advocacy, Association of Nigerian Electricity Distributors, Sunday Oduntan, said the power sector was not working despite being privatised.
Responding to questions during the programme on Saturday, Oduntan stated that the huge money invested in the industry was being threatened, adding that Nigerian banks would not be spared if the power firms failed.
Recall that the successor companies of the defunct Power Holding Company of Nigeria were privatised on November 1, 2013 and were sold to investors that year.
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