Power Struggle: Egbin Rejects Receivership in High-Stakes Legal Clash

A controversy is brewing in Nigeria’s power sector following a legal tussle between Egbin Power Plc’s parent company and a creditor seeking to enforce receivership over unpaid loans.

KEPCO Energy Resources Nigeria Ltd., the core investor in Egbin Power Plc, has found itself at the centre of a receivership row after FBNQuest Trustees Ltd. reportedly moved to reclaim unpaid debts. KEPCO owns a 70 percent stake in Egbin Power, the country’s largest thermal power plant.

According to a notice made public on Wednesday, a Senior Advocate of Nigeria, Kunle Ogunba, was appointed by a court to serve as the Receiver/Manager over KEPCO’s assets, which include its significant interest in Egbin Power. The action, Ogunba said, followed a Security Deed executed in August 2013 and registered with the Corporate Affairs Commission (CAC) in January 2014. He noted that the Receiver/Manager’s appointment was registered at the CAC in June 2025.

The public notice further instructed financial institutions, regulators, and other entities doing business with KEPCO to suspend all transactions related to its assets. Several regulatory bodies were specifically called to take note, including the Nigerian Bulk Electricity Trading Plc (NBET), Nigerian Electricity Regulatory Commission (NERC), and the Bureau of Public Enterprises (BPE).

“All deposits, shares, cash and other valuables held by financial institutions and regulators must remain untouched until further instructions are issued by the courts,” the notice read. Creditors were also urged to forward proof of claims to the Receiver/Manager within two weeks.

Despite the announcement, the situation took a dramatic turn as Sahara Group, the parent company of KEPCO, strongly refuted the claim, describing it as misleading and legally untenable. The group stressed that Egbin Power Plc, along with sister companies First Independent Power Limited and Ikeja Electric Plc, remain operational, financially sound, and fully under the control of their legitimate management.

A spokesperson for the power firms’ legal team stated that the receivership claim was not only baseless but was made in defiance of court orders restraining any such action. Recent court rulings, according to the companies, have specifically barred the enforcement of any adverse measures tied to the disputed debt or finance documents.

The Federal High Court in Lagos had reportedly issued rulings on August 5, 2025, restraining FBNQuest and its appointed Receiver/Manager from interfering with the operations or assets of the affected power companies. The court prohibited any attempts to accelerate the loan repayment timeline, seize assets, or enforce any securities related to the alleged debt prior to its maturity.

The companies argued that the notice published on the receivership matter amounted to “a malicious attempt at self-help,” designed to undermine the due process of the law.

This latest clash adds to growing concerns over the fragile state of Nigeria’s power sector. A number of power firms have already been taken over by creditors in recent years due to mounting debts. With Egbin Power now facing similar challenges, stakeholders fear that further disruptions could destabilise the already ailing sector.

Commenting on the implications of the development, an industry expert said the situation underscored the underlying systemic issues facing the sector since its privatisation in 2013. He identified poor financial planning, underperforming assets, weak technical capacity, and an unrealistic tariff regime as some of the persistent problems bedevilling the sector.

“There’s a contradiction between the commercial interests of private investors and the government’s political agenda for cheap electricity. This has led to an unsustainable subsidy burden and worsening liquidity in the power sector,” the analyst noted.

He further observed that some of the industry’s biggest players are struggling to survive under Nigeria’s high-interest lending environment. With most operators heavily leveraged, it becomes nearly impossible to keep long-term power infrastructure projects financially afloat.

“It is concerning that even Ikeja Electric—often praised as the most effective distribution company in Nigeria—has been linked to receivership moves. If true, it could signal deeper issues for other power firms down the line,” he warned.

Already, five distribution companies—Abuja, Benin, Kaduna, Kano, and Ibadan—have been taken over by lenders due to unpaid loans. If Egbin Power also succumbs to receivership, experts fear it could trigger a domino effect across the power ecosystem.

Amid this legal and financial uncertainty, calls are growing for the federal government to intervene decisively. Industry players are urging the authorities to provide a stabilisation plan and a clear policy direction to prevent further collapses in the sector.

“The power sector isn’t just another business venture—it’s the backbone of national development. If left to creditors alone, the receivership process may prioritise loan recovery over the country’s economic and social needs. This could have devastating consequences for industries, households, and national productivity,” a sector observer concluded.

Despite the ongoing court battle, Egbin Power and its sister companies have reiterated their commitment to delivering reliable power supply across Nigeria. They expressed confidence in the judicial system and pledged to continue serving their customers while legal processes unfold.

As the legal drama continues, the future of Egbin Power and the broader power sector remains uncertain, with all eyes now on the courts and regulators to provide clarity and direction.