POWER: Electricity Distribution Companies To Undergo Major Overhaul, Says FG ..... Begins Pilot Scheme With Two DisCos

Power Minister, Adebayo Adelabu 

"The pilot scheme, slated to commence between May and August 2025, will target one DisCo in the North and another in the South", Adelabu. 

.... "It aims to demonstrate a replicable model for operational turnaround, combining internal restructuring, external expertise, and federal oversight to achieve rapid improvements in service delivery."

In its quest to revitalize Nigeria’s electricity distribution sector, moves to initiate sweeping reforms have been commenced by the Federal Government, starting with a pilot overhaul of two underperforming Distribution Companies (DisCos). 

This follows a comprehensive assessment of systemic challenges plaguing the DisCos, including governance gaps, infrastructure deficits, and commercial inefficiencies, a statement by the Special Adviser Strategic Communications and Media Relations, Bolaji Tunji and credited to the Minister of Power, Chief Adebayo Adelabu revealed.

The Power Minister disclosed the plan after a meeting with the Japanese International Cooperation Agency (JICA), which presented a roadmap titled, ‘Revamping of the Distribution Sector in Nigeria’.  

"The pilot scheme, slated to commence between May and August 2025, will target one DisCo in the North and another in the South. It aims to demonstrate a replicable model for operational turnaround, combining internal restructuring, external expertise, and federal oversight to achieve rapid improvements in service delivery." The statement read.

JICA’s proposal emphasizes reforming DisCos “from within” by integrating outside experts, strengthening leadership, and aligning government support with short-term results in pilot zones to lay the groundwork for long-term sector-wide transformation.  

Adelabu stressed the urgency of the intervention, stating that, “We can no longer fold our hands and watch the inadequacies of DisCos whose performances fall short of expectations. This pilot is not optional; we will use regulatory authority to restructure underperforming DisCos and compel compliance if necessary.”

He acknowledged persistent resistance to past reforms but vowed to address both universal challenges; such as vandalism and governance, and region-specific issues, including cultural barriers hindering operations.  

The Minister pointed out that, "Key to the initiative is resolving the DisCos’ inability to invest in infrastructure upgrades".

Chief Adebayo Adelabu explained that, “Their lack of investment is not solely due to unwillingness but also a lack of incentives. Returns on infrastructure spending are not commensurate, so we must attract investors and franchise viable and the not so viable areas to capable operators, so we can have a mix.”

He directed the Nigeria Electricity Regulatory Commission (NERC) to enforce franchising opportunities and ensure DisCos’ cooperation, noting that, “NERC must secure their buy-in. Past efforts failed due to resistance, but this time, we will be intentional and decisive.”  

The Minister also highlighted the need for public education to clarify 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“, he added.  

JICA’s proposal, developed after the Minister’s earlier visit to Japan’s energy market, underscores a “holistic approach” to revamping distribution, including proactive government-JICA collaboration and measurable milestones. Takeshi Kikukawa, JICA’s Power Sector Policy Advisor to Nigeria noted during the presentation that, “The goal is to deliver immediate results in pilot areas while creating a sustainable foundation for nationwide improvement.”

"The Federal Ministry of Power and NERC will finalize pilot details in the coming months, prioritizing DisCos with acute operational deficits. The initiative marks the most robust effort to date to resolve power distribution crisis, signalling a renewed push for accountability, investor confidence, and reliable electricity access." The statement concluded.