Nigeria Launches Major Electricity Reform Initiative
In a bid to revamp its struggling electricity distribution sector, the Federal Government of Nigeria has embarked on a significant initiative to overhaul two underperforming Distribution Companies (DisCos). The pilot reform scheme, set to commence between May and August, will target one DisCo in the North and another in the South. This move follows a comprehensive assessment of the systemic challenges plaguing the DisCos, including governance gaps, infrastructure deficits, and commercial inefficiencies.
According to Minister of Power, Adebayo Adelabu, the overhaul of the DisCos aims to demonstrate a replicable model for operational turnaround, combining internal restructuring, external expertise, and federal oversight to achieve rapid improvements in service delivery. The minister emphasized the urgency of the intervention, stating that the government can no longer ignore the inadequacies of DisCos whose performances fall short of expectations. “This pilot is not optional, we will use regulatory authority to restructure underperforming DisCos and compel compliance if necessary,” he said.
The initiative is the result of a collaboration between the Nigerian government and the Japanese International Cooperation Agency (JICA), which presented a roadmap titled “Revamping of the Distribution Sector in Nigeria.” JICA’s proposal underscores a “holistic approach” to revamping distribution, including proactive government-JICA collaboration and measurable milestones. The goal is to deliver immediate results in pilot areas while creating a sustainable foundation for nationwide improvement, according to Takeshi Kikukawa, JICA’s Power Sector Policy Advisor to Nigeria.
One of the key initiatives is resolving the DisCos’ inability to invest in infrastructure upgrades. The minister noted that the lack of investment is not solely due to unwillingness but also a lack of incentives. “Returns on infrastructure spending are not commensurate, so we must attract investors and franchise viable and not-so-viable areas to capable operators, so we can have a mix,” he said. The Nigeria Electricity Regulatory Commission (NERC) has been directed to enforce franchising opportunities and ensure DisCos’ cooperation.
The minister also highlighted the need for public education to clarify the roles of generation, transmission, and distribution entities. Many Nigerians still view the sector as a single entity, and educating consumers is critical to building trust and support for these reforms. The ministry of power and NERC will finalize pilot details in the coming months, prioritizing DisCos with acute operational deficits. This initiative marks the most robust effort to date to resolve the power distribution crisis, signaling a renewed push for accountability, investor confidence, and reliable electricity access.
