FG Mulls Re-Privatisation of Discos in Sweeping Electricity Sector Reform

The Federal Government may repossess and re-privatize Nigeria’s 11 power distribution companies (Discos) if the proposed Electricity Act (Amendment) Bill, 2025 is passed into law. The bill, currently before the National Assembly, seeks to address years of poor performance in the sector and empower the Nigerian Electricity Regulatory Commission (NERC) to enforce strict compliance from core investors.

Sponsored by Senator Enyinnaya Abaribe (Abia South), the amendment aims to strengthen regulatory oversight by compelling investors to inject fresh capital into the Discos within 12 months or face penalties such as share dilution, receivership, or outright re-privatization.

According to the draft bill, these measures will take effect immediately after the amendment is signed into law. The bill, which has passed its second reading, has triggered widespread industry debate. While some stakeholders support the move, others, like the Forum of Commissioners of Power and Energy, have warned it could undermine the newly decentralized electricity market created under the 2023 Electricity Act.

The 11 Discos affected include those serving Abuja, Benin, Eko, Enugu, Ibadan, Ikeja, Jos, Kaduna, Kano, Port Harcourt, and Yola. The bill proposes that a comprehensive financing framework be developed within a year to overhaul the Nigerian Electricity Supply Industry (NESI), reduce reliance on subsidies, and encourage long-term local currency investments, especially in gas-to-power and distributed energy projects.

Sections 228J and 228K of the amendment mandate the Minister of Power, in consultation with NERC, to establish clear guidelines for recapitalization, promote cost-reflective tariffs, and attract new investment. It also calls for federal and state governments to clarify their equity stakes in Discos and make corresponding financial contributions.

While the bill has been praised for holding Discos accountable, experts say its success depends on clearing over ₦4 trillion in sector-wide debt and allowing a longer recapitalization window, similar to past banking reforms.

In May 2025, the Bureau of Public Enterprises reported that over 70% of Discos had failed to meet key performance targets set during the 2013 privatization. Minister of Power, Adebayo Adelabu, echoed this disappointment, stating that despite trillions of naira invested, electricity supply remains unreliable for millions of Nigerians.

“The performance of the Discos has been grossly underwhelming,” Adelabu said at a media briefing. “We can no longer tolerate excuses. If you can’t invest, give way to those who can.”

While some Discos have remained silent, others argue that once the law is enacted, they have no choice but to comply.