The Federal Government has begun a pilot programme to restructure underperforming electricity distribution companies (Discos) in a bid to overhaul Nigeria’s struggling power distribution sector. This marks the most decisive move yet to revive service delivery and restore investor confidence in the industry since its privatisation in 2013.
According to the Minister of Power, Adebayo Adelabu, two Discos—one from the North and one from the South—will undergo restructuring between May and August 2025. This intervention comes after a recent evaluation of the sector exposed deep-rooted problems including weak governance, poor infrastructure, and commercial inefficiencies.
The announcement followed a strategic meeting between Adelabu and officials of the Japan International Cooperation Agency (JICA), where a detailed roadmap titled “Revamping of the Distribution Sector in Nigeria” was presented. The roadmap outlines a collaborative approach between the government, international experts, and local Discos to drive measurable reform.
Adelabu, through a statement issued by his Special Adviser on Strategic Communications and Media Relations, Mr. Bolaji Tunji, said the reforms would be enforced using regulatory powers where necessary.
“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 compel compliance,” he stated.
A government source confirmed that experts will be embedded into the operations of the two selected Discos to identify problems, make recommendations, and help implement reforms. The source clarified that the move is not a government takeover but a collaborative restructuring to strengthen the internal systems of the affected companies.
The pilot is expected to serve as a blueprint for broader sector-wide reform. Experts will focus on improving operations, management, and customer service, while also identifying infrastructure gaps. The outcome will inform the expansion of reforms to other Discos nationwide.
Discos such as Ikeja, Abuja, Eko, and Ibadan have historically been ranked higher in terms of performance, while others like Jos, Yola, Kano, and Kaduna have been flagged for operational challenges. Though the specific names of the Discos selected for the pilot were not disclosed, sector insiders believe those with the most acute deficits are likely targets.
The reform also includes a push for franchising parts of the electricity distribution network, especially in less viable areas. Adelabu explained that the lack of investment in the sector is largely due to poor returns and that incentives must be created to attract both capital and capable operators.
“Returns on infrastructure spending are not commensurate, so we must attract investors and franchise both viable and non-viable areas to capable operators,” he added.
He also directed the Nigerian Electricity Regulatory Commission (NERC) to drive implementation, enforce cooperation from Discos, and push forward with public awareness campaigns to help Nigerians better understand the sector.
JICA’s Power Sector Policy Advisor to Nigeria, Takeshi Kikukawa, noted during the presentation that the goal is to deliver immediate results in the pilot areas while building a sustainable foundation for long-term development.
In reaction to the government’s move, the Association of Nigerian Electricity Distributors (ANED), which represents all Discos, declared their support for reforms that can improve power delivery, distancing themselves from political interference in the sector.
The Executive Director of Research and Advocacy at ANED, Mr. Sunday Oduntan, said that the Discos are cooperating with both the federal and state governments.
“We are for progress and interested in anything that will improve the power sector. We are not interested in the politics of the power sector. We are interested in the good policies of the Federal Government,” he said.
Adelabu reiterated that the new approach is different from past interventions, which often met resistance from stakeholders. This time, he assured, the reforms will be “intentional and decisive,” addressing both nationwide problems and regional challenges such as vandalism and community resistance.
The government is under increasing pressure to act, as 12 years after the privatisation of the power sector, Nigeria still faces erratic supply, low investments, and poor customer service. Industry experts and consumer groups have also criticised the lack of licence reviews for Discos since 2013, despite widespread non-performance.
With the deployment of special teams and a collaborative restructuring strategy, the government is hoping to kickstart a turnaround in the distribution segment—the weakest link in Nigeria’s electricity value chain.
