FG launches power sector reform with overhaul of two Failing DisCos

The Federal Government of Nigeria has kickstarted a bold reform initiative aimed at revamping the country’s electricity distribution sector, beginning with a pilot overhaul of two underperforming Distribution Companies (DisCos)—one each in the North and South of the country.

This landmark move was confirmed by the Minister of Power, Adebayo Adelabu, on Tuesday in Abuja.

He stated that the reform is the first phase of a wider turnaround plan to address long-standing failures in Nigeria’s power supply chain, particularly at the distribution level, which remains the weakest link in the sector.

“We have identified critical gaps in governance, infrastructure, and commercial operations across several DisCos. This reform is aimed at correcting these systemic issues,” Adelabu said.

The reform initiative is being developed in partnership with the Japanese International Cooperation Agency (JICA), which has submitted a comprehensive roadmap titled “Revamping of the Distribution Sector in Nigeria.” The plan outlines strategies for stabilizing and improving electricity delivery across the country.

A high-level meeting was held recently between the Ministry of Power and JICA officials, where the roadmap was reviewed and endorsed for phased implementation.

The pilot phase of the overhaul is expected to roll out between May and August 2025, with a focus on one DisCo in the Northern region and another in the Southern region. These companies were selected based on performance metrics and the severity of operational challenges they face.

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“This pilot is designed to demonstrate that with the right reforms, Nigeria’s DisCos can be turned around to deliver reliable and efficient electricity,” Adelabu added.

Nigeria’s power sector has struggled with persistent inefficiencies since the unbundling of the former Power Holding Company of Nigeria (PHCN) over a decade ago. While generation and transmission have seen some progress, the distribution sub-sector remains riddled with poor metering, energy losses, and weak revenue collection.

The Minister emphasized that correcting these failings is essential to realizing Nigeria’s economic and industrial potential, and restoring public confidence in the country’s electricity supply system.

The government is also expected to engage with other stakeholders including the Nigerian Electricity Regulatory Commission (NERC), Bureau of Public Enterprises (BPE), investors, and consumer advocacy groups to ensure a transparent and inclusive reform process.

Industry observers have welcomed the move as a step in the right direction, though they caution that sustained political will and proper execution will be key to success.

“This is the kind of bold thinking we need in the sector. If implemented properly, this could serve as a turning point,” said Chidi Eke, an energy policy analyst.

The outcome of the pilot reform could set the tone for broader restructuring across the nation’s 11 electricity distribution companies, potentially unlocking improved service for millions of Nigerians long plagued by erratic power supply.