Oct 29, 2025 (This Day/All Africa Global Media via COMTEX) --
The federal government yesterday announced that it plans to order Nigeria's electricity Distribution Companies (Discos) to recapitalise after the expiration of their current licences in a bid to boost liquidity in the power sector.
Speaking in Lagos at the Nigeria Energy Forum 2025, Minister of Power, Bayo Adelabu, noted that stakeholders are already working together to fashion out an appropriate capital base for the 12 Discos.
According to him, the power sector continues to face challenges of under-capitalisation among several Discos and a severe debt burden that has constrained their operational efficiency and service delivery over the years.
"On sector performance monitoring and enforcement, the National Regulator and the State Regulatory Commissions are working in close synergy to drive performance improvement across the utilities. The sector continues to face challenges of under-capitalisation among several Distribution Companies (Discos) and a severe debt burden that has constrained their operational efficiency and service delivery over the years.
"As the tenure of their operational licenses approaches renewal, the government intends to introduce a minimum capital adequacy requirement as part of the license renewal process, to strengthen the financial health and liquidity position of the utilities," Adelabu stated.
Besides, he stressed that the country has over 10GW of stranded generation capacity, which could power industries, create jobs, and even support electricity exports to neighbouring countries through the regional power pool.
"In Nigeria today, we have over 10GW of stranded generation capacity. Energy that could power industries, create jobs, and even support electricity exports to our neighboring countries through the regional power pool.
"We are therefore open to strategic partnerships to mobilise the necessary investments and unlock this potential. Our market fundamentals are improving, our policy environment is clear, and the national leadership is committed to creating the enabling conditions for long-term investment and innovation," Adelabu added.
This year's theme: "Powering Nigeria through Investment, Innovation, and Partnership,", he said, captures the essence of our collective aspiration to build a resilient, inclusive, and sustainable energy future.
Adelabu stated that Nigeria is pursuing a comprehensive, multi-pronged approach to reposition the nation's power sector for sustainability, efficiency, and growth. This approach, he said, spans critical pillars which include legislation, policy reforms, infrastructure development, energy transition and access expansion, among others.
He highlighted the enactment of the Electricity Act 2023, which he said remains a major milestone, providing a robust governance and regulatory framework for the Nigerian Electricity Supply Industry (NESI).
The Act, according to him, devolves regulatory powers to the states, enables subnational markets, promotes competition, and empowers private participation across the value chain. This represents a clear shift towards a liberalised and investment-friendly electricity market.
"Since its passage, 15 states have received regulatory autonomy to establish subnational electricity markets with one fully operationalized. We are working actively with these states to ensure strong alignment between the wholesale market and the retail market.
" In this regard, we believe the active involvement of state governments, particularly in the off-grid segment is critical, given the series of roundtable engagements held with governors by the Rural Electrification Agency (REA), as well as the ongoing efforts to closely track the Disco performance within their respective jurisdictions.
Adelabu stated that the government is deepening power sector commercialisation to strengthen revenue, liquidity, and investor confidence, explaining that through tariff policy reforms which enabled cost-reflective tariffs for select consumers, supply reliability has improved while reducing energy costs for industries.
Besides , Adelabu reiterated that industry revenue has increased by 70 per cent to N1.7 trillion in 2024 compared to previous year and the revenue is expected to exceed N2 trillion for 2025.
He stressed that to stabilise the market, President Bola Tinubu has approved a N4 trillion bond to clear verified Generation Companies (Gencos) and gas supply debts.
Alongside this, the minister explained that a targeted subsidy framework is being developed to protect vulnerable households and ensure a sustainable path toward full commercialisation and viable industry.
In the area of infrastructure development, the federal government has introduced targeted national programmes aimed at accelerating the viability, expansion, and modernisation of the national grid.
"Under the phase zero of the Presidential Power Initiative (PPI), we enhanced transmission capacity, grid stability, and overall system reliability, with over 700MW of additional transmission capacity already achieved.
" Under the PPI Phase One, contracts have been signed with Siemens Energy, CMEC, Elswedy Electric, and Power China. Financing arrangements are underway to support implementation. Phase one is planned to add 7000MW operational capacity to the grid.
"In parallel to the grid expansion, generation capacity is being expanded through the rehabilitation of existing NIPP plants to unlock about 345MW, alongside the successful integration of the 700MW Zungeru Hydropower Plant into the grid.
" Collectively, these interventions have helped sustain an average generation capacity of approximately 5,300MW in 2024 up from 4,200MW recorded in 2023," Adelabu said.
COMTEX_469889298/2029/2025-10-29T11:03:04
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