The Nigerian Federal Government is reportedly preparing to re-privatise the country’s 11 electricity distribution companies (Discos) contingent on the passage of the Electricity Act (Amendment) Bill, 2025, currently before the National Assembly. The legislation seeks to compel core investors to inject fresh capital into the power sector, promising stringent regulatory actions—including share dilution, receivership, or outright re-privatisation—should these investors fail to meet investment thresholds within a 12-month window.
Sponsored by Senator Enyinnaya Abaribe (Abia South), this amendment aims to correct regulatory shortcomings in the 2023 Electricity Act by enforcing tougher accountability measures on Discos. The proposed bill has progressed past its second reading and is under further scrutiny by lawmakers, highlighting the urgency to address Nigeria’s persistent electricity supply challenges.
According to the draft amendment, shared on Monday, the Nigerian Electricity Regulatory Commission (NERC) will be empowered to require the recapitalisation of these companies or invoke sanctions on defaulters. As okay.ng reports, the 11 affected Discos cover various regions, including Abuja, Benin, Eko, Enugu, Ibadan, Ikeja, Jos, Kaduna, Kano, Port Harcourt, and Yola.
The amendment further mandates the establishment of a comprehensive financing framework within 12 months to revamp the financial health of the Nigerian Electricity Supply Industry (NESI). This framework will prioritize local currency financing, phase out unstructured subsidies, and enhance tariff transparency to encourage investor confidence. The Minister of Power, in partnership with NERC, is charged with leading these reforms to reduce the sector’s crippling debt burden, estimated to exceed N4 trillion.
Despite the government’s intentions, power sector analysts and consumer advocates emphasize the need to first resolve existing subsidy debt issues before the law’s provisions can be effectively implemented. Some experts suggest extending the recapitalisation deadline from 12 to 24 months to mirror successful recapitalisation efforts in other sectors, offering a more realistic timeline for investor compliance.
The bill has triggered fierce debate, with the Forum of Commissioners of Power and Energy warning it might destabilize the country’s nascent decentralised electricity market, potentially eroding reforms once achieved. Meanwhile, the Minister of Power, Adebayo Adelabu, has reiterated government disappointment with the Discos’ long-standing underperformance. In a previous briefing, Adelabu said, “The performance of the Discos has been grossly underwhelming… We can no longer tolerate excuses. If you can’t invest, give way to those who can.”
Industry insiders, however, maintain that the amendments should be viewed as mandates that require cooperation rather than opposition. One anonymous official from the distribution companies commented, “The regulatory commission has its powers… we believe in the wisdom of the National Assembly to amend the law, and we are ready to work with all stakeholders to ensure the laws are implemented.”
The power sector continues to grapple with chronic challenges, including unreliable supply and ineffective policy implementation, underscoring the critical need for structural reforms. As the bill moves toward its final stages, stakeholders await its enactment and subsequent impacts on Nigeria’s electricity distribution landscape.
