Steep interest charges and policy inconsistencies driving Ikeja Electric into bankruptcy protection, as per CPPE CEO's statement
Ikeja Electric Plc, one of Nigeria's leading electricity distribution companies, has found itself in receivership, according to a statement by the Centre for the Promotion of Private Enterprise (CPPE). The company's current head, Folake Soetan, who serves as the Managing Director and Chief Executive Officer (CEO), continues to lead the company as Acting CEO since March 2, 2020.
The CPPE's statement suggests a similar fate could await other distribution companies in the near term. Dr Muda Yusuf, the Director/CEO of the CPPE, highlighted the crisis afflicting Ikeja Electric and other electricity distribution companies (DisCos) as a clear reflection of Nigeria's harsh macroeconomic environment, most notably, the burden of prohibitive interest rates.
The high degree of leveraging of most DisCos makes it very difficult for any long-term project to survive the current excruciating lending rate in the economy, Dr Yusuf noted. He also identified a fundamental structural imbalance in the Nigerian power sector, highlighting conflicting interests between investors, consumers, and political actors as a major challenge.
The government's obstruction and the citizens' opposition to cost-reflective tariffs, despite demands from private investors in the sector, further complicate the situation in the Nigerian power sector. The power sector's challenges include clear conflicts between the commercial objectives of private investors, the citizens' desire for affordable electricity, the quest by industrialists for an investment-friendly electricity tariff, and a politically acceptable tariff regime.
Babatunde Osadare, the Chief Legal and Regulatory Officer of Ikeja Electric, refuted the appointment of "Kunle Ogunba Esq. SAN" as Receiver/Manager over the said entities. The management of Ikeja Electric, Egbin Power Plc, and First Independent Power Limited has also denied being in receivership, with the court warning against "adverse actions" by a party.
The CPPE statement also noted that Ikeja Electric, often considered the best-performing electricity distribution company in Nigeria, has ended up in receivership. The Central Bank of Nigeria (CBN) retained the Monetary Policy Rate (MPR) at 27.5% in July 2025, making Nigeria one of the countries with the highest borrowing costs in Africa.
Dr Yusuf made these statements on Wednesday, emphasising the need for careful and painstaking strategic resolution of the numerous contradictions and conflicts in the Nigerian power sector. The future of Nigeria's electricity distribution companies hangs in the balance as stakeholders grapple with these challenges.
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