FG MAY RE-PRIVATIZE 11 ELECTRICITY DISTRIBUTION COMPANIES UNDER NEW AMENDMENT BILL
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Agency Report
The Federal Government may re-privatize Nigeria’s 11 power distribution companies (Discos) if they fail to inject fresh capital within 12 months of the passage of the proposed Electricity Act (Amendment) Bill, 2025.
The amendment bill, currently before the National Assembly and sponsored by Senator Enyinnaya Abaribe (Abia South), seeks sweeping reforms in Nigeria’s power sector, aiming to address long-standing issues of poor performance, financial instability, and regulatory lapses in the electricity supply chain.
The bill has passed its second reading and proposes to overhaul key sections of the 2023 Electricity Act. It grants the Nigerian Electricity Regulatory Commission (NERC) the authority to compel core investors in the Discos to recapitalise or face punitive measures including share dilution, receivership, or outright re-privatisation.
A copy of the amendment outlines that within 12 months of enactment, a new financing framework must be developed to tackle the Nigerian Electricity Supply Industry’s (NESI) chronic debt burden, estimated at over N4 trillion. The framework is to prioritise long-term local currency financing, gas-to-power optimisation, distributed energy projects, and the phasing out of unstructured subsidies.
The bill also mandates the Federal Government, through the Minister of Power and in consultation with NERC, to develop a strategic implementation plan. It requires both the federal and state governments to clarify and meet their equity obligations in the Discos.
If the bill is enacted, the 11 Discos that could be affected include: Abuja, Benin, Eko, Enugu, Ibadan, Ikeja, Jos, Kaduna, Kano, Port Harcourt, and Yola Electricity Distribution Companies.
The bill has triggered backlash from stakeholders, including the Forum of Commissioners of Power and Energy, who argue that it may derail progress made under the decentralised electricity market introduced by the 2023 Act.
While the government insists the move is necessary due to consistent underperformance despite bailouts and policy support, some experts have called for a more gradual implementation. Power sector analyst Habu Sadiek recommended extending the recapitalisation deadline to 24 months and settling pending subsidy debts first, citing lessons from Nigeria’s past banking sector reforms.
Minister of Power, Adebayo Adelabu, has been vocal about the poor delivery record of Discos, lamenting the failure of the companies to meet expectations despite massive government interventions. In May, he stated, “The performance of the Discos has been grossly underwhelming. If you can’t invest, give way to those who can.”
The Nigerian Electricity Regulatory Commission has yet to officially comment, but a senior Disco official anonymously stated that the law, once enacted, would be binding and that Discos are prepared to comply. “When the National Assembly makes laws, it is binding on all of us. We must collectively implement it,” he said.
The bill also empowers NERC to issue directives that would not disrupt service delivery or undermine investor confidence, even in cases of recapitalisation or change in ownership.
Meanwhile, the Ministry of Power has begun deploying reform teams to underperforming Discos as part of an ongoing restructuring initiative, following a roadmap developed with the Japanese International Cooperation Agency (JICA).
As the bill continues its legislative journey, all eyes are on whether the government will adopt a hardline stance or adjust timelines to accommodate investor concerns while pushing for meaningful transformation in Nigeria’s troubled power sector.
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