The Federal Government may revoke the ownership of Nigeria’s 11 power distribution companies (Discos) and re-privatise them under a proposed Electricity Act (Amendment) Bill, 2025, currently before the National Assembly.
The new amendment bill, sponsored by Senator Enyinnaya Abaribe (Abia South), seeks to address longstanding inefficiencies in the Nigerian Electricity Supply Industry (NESI) by strengthening regulatory oversight and compelling core investors in the Discos to inject fresh capital or face sanctions—including share dilution, receivership, or outright re-privatisation.
The bill, which has passed second reading in the Senate, aims to overhaul the 2023 Electricity Act by closing regulatory gaps and introducing mechanisms to de-risk investment in the power sector. It mandates a 12-month recapitalisation deadline for core Disco investors, failing which stiff regulatory actions may be triggered.
A draft of the proposed amendment, seen by The PUNCH, empowers the Nigerian Electricity Regulatory Commission (NERC) to enforce recapitalisation directives and oversee a broader financial restructuring of the sector, with an emphasis on long-term local currency financing, cost-reflective tariffs, and phasing out unstructured subsidies.
“This legislation is long overdue,” said Power Minister Adebayo Adelabu during a recent media briefing in Abuja. “The performance of the Discos has been grossly underwhelming. We cannot continue to allow inefficiency to cripple our national progress. If they cannot invest, they must step aside for those who can.”
There are currently 11 electricity distribution companies in Nigeria serving different regions: Abuja, Benin, Eko, Enugu, Ibadan, Ikeja, Jos, Kaduna, Kano, Port Harcourt, and Yola.
Under Sections 228J and 228K of the amendment bill, the Minister of Power, in collaboration with NERC, is tasked with developing a comprehensive financing framework for NESI within 12 months of the bill’s commencement. The framework is expected to prioritise investments in gas-to-power and distributed energy projects, implement tariff reforms that support cost recovery, and provide tax incentives to attract private capital.
“The government shall take all necessary steps to reduce reliance on diesel and petrol-based self-generation and resolve the sector’s debt overhang, currently estimated at over N4 trillion,” the bill states.
While the bill has garnered support in some quarters, it has also sparked criticism. The Forum of Commissioners of Power and Energy warned that the legislation could undermine the newly decentralised electricity market and reverse critical gains made under the 2023 Act.
Industry experts, including energy analyst Chinedu Amah, argue that Nigeria’s power sector is not lacking in policy direction but in execution. “We are drowning in policy documents,” Amah said. “What we lack is effective implementation and regulatory discipline.”
Some stakeholders have also called for an extension of the recapitalisation timeline from 12 to 24 months, citing the need for a realistic transition similar to the Central Bank of Nigeria’s past banking sector reforms.
Despite these concerns, distribution company officials have pledged compliance. An official of one of the Discos, speaking anonymously to The PUNCH, stated: “When laws are passed, they are binding. Our focus now is to collaborate with regulators and other stakeholders to implement them effectively.”
The government’s new posture follows over a decade of underperformance by the Discos since the 2013 privatisation. Despite multiple bailouts, debt forgiveness, and tariff adjustments, Nigerians continue to suffer from unreliable electricity supply.
A May 2025 report by the Bureau of Public Enterprises revealed that over 70 percent of the Discos have failed to meet key performance indicators agreed upon during their acquisition.
With the amendment bill nearing passage, all eyes are now on the National Assembly as Nigerians await reforms that may finally deliver long-promised improvements in power supply.
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