ABUJA – The Federal Government may initiate a fresh re-privatisation of Nigeria’s 11 electricity distribution companies (Discos) if they fail to recapitalise within 12 months, following sweeping reforms proposed in the Electricity Act (Amendment) Bill, 2025.
The bill, currently undergoing legislative scrutiny in the National Assembly, is sponsored by Senator Enyinnaya Abaribe (Abia South) and seeks to address persistent failures in the electricity sector through an overhaul of the 2023 Electricity Act.
If signed into law, the Nigerian Electricity Regulatory Commission (NERC) will be empowered to compel investors in the Discos to inject fresh capital or face share dilution, receivership, or re-privatisation.
The proposed reforms have drawn criticism from the Forum of Commissioners of Power and Energy, which warned that the amendments could undermine the decentralised power market established under the 2023 Act.
The bill also mandates the establishment of a comprehensive financial framework for the power sector within 12 months, with a focus on attracting local currency investment, phasing out unstructured subsidies, and resolving a sector-wide debt burden estimated at over N4 trillion.
The 11 Discos potentially affected include: Abuja, Benin, Eko, Enugu, Ibadan, Ikeja, Jos, Kaduna, Kano, Port Harcourt, and Yola Electricity Distribution Companies.
Under Sections 228J and 228K of the amended bill, the Minister of Power, in consultation with NERC, must outline a financing strategy to stabilise the sector and drive cost recovery through tariff reforms and re capitalization.
Minister of Power, Adebayo Adelabu, recently lamented the continued poor performance of Discos despite multiple financial bailouts and infrastructure interventions.
“We can no longer tolerate excuses,” he said. “If you can’t invest, give way to those who can.”
An official at one of the Discos, who spoke anonymously, downplayed concerns, stating that the law will be binding once passed and that all stakeholders must work together for effective implementation.
Electricity market expert Chinedu Amah described the sector’s problem as one of poor implementation rather than a lack of policy.
He argued for removing subsidies and liberalising tariffs to attract serious investors.
Meanwhile, analyst Habu Sadiek called for the government to first clear subsidy arrears and extend the recapitalization window to 24 months, akin to the banking sector’s approach.
Efforts to obtain comments from NERC were unsuccessful, as the phone number of its Director of Public Affairs, Usman Arabi, was unreachable.
Meanwhile, Adelabu’s media aide, Bolaji Tunji, said the reform process targeting two underperforming Discos is still ongoing and will be concluded in the coming weeks
