The Federal Government of Nigeria is set to impose stringent measures on electricity distribution companies (Discos) through the Electricity Act (Amendment) Bill, 2025, which is currently under deliberation in the National Assembly. This legislation introduces a re-privatisation clause that could see the government retake ownership stakes in the 11 Discos if investors fail to inject fresh capital into these companies within one year of the bill’s enactment.
Senator Enyinnaya Abaribe, the bill’s sponsor, is advocating for reforms to the 2023 Electricity Act, underscoring the need to close regulatory gaps that have hampered sectoral growth and investment. The current amendment bill introduces tough sanction powers for the Nigerian Electricity Regulatory Commission (NERC), including share dilution, receivership, and re-privatisation as a last resort.
Details from a draft amendment reveal the significant challenge of reviving a debt-stricken distribution sector, with financial liabilities exceeding N4 trillion. Additionally, the Minister of Power is mandated to devise, in collaboration with NERC, a financing plan aimed at attracting local currency investment and reducing dependence on regressive subsidies.
The affected Discos service Nigeria’s major regions, including Abuja, Kano, Port Harcourt, and others, where electricity supply continues to be erratic and largely unsatisfactory despite previous government bailouts and debt forgiveness efforts.
Critics of the bill, notably the Forum of Commissioners of Power and Energy, warn that stringent measures could threaten the country’s recent market decentralisation achievements, possibly destabilizing the market at a crucial reform juncture. Conversely, proponents argue that stronger regulatory frameworks and recapitalisation mandates are essential to reversing years of inefficiency.
At a May 2025 press event, Minister of Power Adebayo Adelabu criticized the Discos, stating, “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.”
Insiders within the Discos, speaking anonymously, acknowledge the imperative to comply with any passed legislation, stressing willingness to collaborate in implementing the amended act. “We believe in the wisdom of the National Assembly… and are ready to work with stakeholders,” affirmed one source.
The impending reforms are part of a broader plan that includes pilot restructuring programmes with international partners aimed at improving service delivery and sustainability in the sector, with ongoing updates promised by officials.