By Atoyebi Nike
The Federal Government may repossess and re-privatize Nigeria’s 11 electricity distribution companies if they fail to inject new capital within 12 months, according to provisions in the Electricity Act (Amendment) Bill, 2025 currently before the National Assembly.
Sponsored by Senator Enyinnaya Abaribe, the bill seeks to strengthen regulatory powers and enforce performance across the power sector. It empowers the Nigerian Electricity Regulatory Commission (NERC) to order share dilution, receivership, or complete re-privatization of Discos that do not meet recapitalization or service benchmarks. The amendment has passed second reading in the Senate and awaits further legislative action.
Under the new law, a comprehensive financing framework must be established within a year, focusing on attracting long-term local currency investments, phasing out fuel-based self-generation, and eliminating unstructured subsidies. Discos, including those under receivership, will be mandated to recapitalize under NERC supervision or risk sanctions.
The move follows years of underperformance by Discos despite multiple financial bailouts and regulatory interventions. Power Minister Adebayo Adelabu recently criticized the firms for frustrating reforms, saying “excuses will no longer be tolerated.”
A May 2025 report by the Bureau of Public Enterprises showed that over 70% of the Discos have failed to meet their privatization targets set since 2013.
Despite support for the bill, energy experts warn that recapitalization alone will not solve the sector’s issues unless the government clears outstanding subsidy debts and adopts cost-reflective tariffs. Some stakeholders also suggest extending the recapitalization window to 24 months, similar to the banking sector’s recapitalization model.
As part of broader reforms, the Power Ministry confirmed ongoing restructuring efforts, including a pilot programme targeting two underperforming Discos in collaboration with Japan’s JICA.
