The Federal Government has launched a major restructuring initiative aimed at revitalising Nigeria’s power distribution sector, deploying special teams to address the performance challenges of underperforming electricity distribution companies (Discos).
The restructuring programme, which will begin with a pilot phase between May and August 2025, will target two Discos, one from the northern and one from the southern part of the country. This move comes as part of an extensive overhaul of the power distribution sector, following a comprehensive assessment that highlighted systemic issues such as governance gaps, inadequate infrastructure, and commercial inefficiencies.
Adebayo Adelabu, the Minister of Power, revealed the government’s plan after a meeting with the Japanese International Cooperation Agency (JICA), which presented a roadmap titled “Revamping the Distribution Sector in Nigeria.” Adelabu stated that the pilot reform is aimed at addressing the inadequacies of the Discos and will not be optional. He added that the government would utilise its regulatory authority to ensure compliance with the restructuring efforts.
“We can no longer fold our hands and watch the inadequacies of Discos whose performances fall short of expectations. This pilot is not optional, and we will use regulatory authority to restructure underperforming Discos and compel compliance if necessary,” said Adelabu.
The Minister explained that the government would deploy external experts to work alongside the underperforming Discos, offering guidance and recommendations on how to improve operations. “It is not about the government taking over; it is about collaboration. We want to know the issues, and the experts will offer suggestions that will now be implemented in other underperforming Discos,” he said.
The ministry identified Ikeja, Abuja, Eko, Ibadan, Benin, Port Harcourt, Enugu, Kano, Kaduna, Jos, and Yola as the 11 Discos in operation. The government has already begun the process of selecting which two will be included in the pilot phase, with the aim of developing a model for operational turnaround that will be applied across the sector.
The new reform is designed to address both national and region-specific challenges, such as vandalism, governance failures, and socio-cultural obstacles that have impeded progress in some areas. Adelabu noted that a key focus of the reform would be resolving the Discos’ inability to invest in infrastructure upgrades, which has hindered service delivery.
To encourage investment in infrastructure, the government plans to attract investors by offering incentives and exploring franchising opportunities for both viable and less viable areas of operation. Adelabu also directed the Nigeria Electricity Regulatory Commission (NERC) to ensure Discos’ cooperation in this regard.
“The NERC must secure their buy-in. Past efforts failed due to resistance, but this time, we will be intentional and decisive,” he said.
While the government aims to hold Discos accountable, it also recognises the need for public education to help Nigerians understand the roles of generation, transmission, and distribution entities. “Many Nigerians still view the sector as a single entity. Educating consumers is critical to building trust and support for these reforms,” Adelabu added.
JICA’s proposal, which aligns with the government’s vision, calls for a holistic approach to distribution sector reforms, with a focus on collaboration and measurable results. JICA’s Power Sector Policy Advisor, Takeshi Kikukawa, noted that the goal was to deliver immediate improvements in the pilot areas and establish a sustainable foundation for nationwide transformation.
The pilot reform initiative marks one of the most ambitious efforts yet to address the ongoing challenges facing Nigeria’s power sector. The government is hopeful that this restructuring will lead to better service delivery, more efficient operations, and improved investment in the electricity distribution network.
Meanwhile, the electricity distribution companies have expressed their commitment to supporting the government’s efforts. Sunday Oduntan, the Executive Director of the Association of Nigerian Electricity Distributors (ANED), stated that the Discos were not involved in power sector politics but would cooperate with the government to implement policies aimed at improving the power sector.
“We are working very hard with the Federal Government and state governments to ensure that we bring electricity to Nigerians. The more electricity we are able to distribute, the more money we can collect, and the more prosperity for Nigeria in terms of job creation,” Oduntan said.
