THE Federal Government has launched a pilot reform to address major problems in Nigeria’s electricity distribution sector, starting with two underperforming Distribution Companies (DisCos), one in the North and another in the South.
This move comes in response to long-standing issues such as poor governance, outdated infrastructure, and inefficiencies that have plagued the DisCos for years.
The Minister of Power, Adebayo Adelabu, outlined the Electricity Distribution Companies reforms after a meeting with the Japanese International Cooperation Agency (JICA), which presented a roadmap titled ‘Revamping of the Distribution Sector in Nigeria’.
A statement signed by the Special Adviser on Strategic Communications and Media Relations to the Minister, Bolaji Tunji, on Monday, May 12, said the pilot scheme, slated to commence between May and August 2025, will target one DisCo in the north and another in the south.
The aim is to demonstrate a replicable model for operational turnaround, combining internal restructuring, external expertise, and federal oversight to achieve rapid improvements in service delivery.
The JICA’s proposal emphasises reforming DisCos “from within” by integrating outside experts, strengthening leadership, and aligning government support with short-term results in pilot zones to lay the groundwork for long-term sector-wide transformation.
Adelabu stressed the urgency of the intervention when he said, “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 restructure underperforming DisCos and compel compliance if necessary.”
The Minister, who acknowledged persistent resistance to past reforms, pledged to address both universal challenges, such as vandalism and governance, as well as region-specific issues, including cultural barriers hindering operations.
He emphasised that the key to the initiative is resolving the DisCos’ inability to invest in infrastructure upgrades.
“Their lack of investment is not solely due to unwillingness but also a lack of incentives. Returns on infrastructure spending are not commensurate, so we must attract investors and franchise viable and the not-so-viable areas to capable operators, so we can have a mix,” Adelabu added.
He directed the Nigeria Electricity Regulatory Commission (NERC) to enforce franchising opportunities and ensure DisCos cooperation, stating, “NERC must secure their buy-in. Past efforts failed due to resistance, but this time, we will be intentional and decisive.”
The JICA’s Power Sector Policy Advisor to Nigeria, Takeshi Kikukawa, during the presentation, said, “The goal is to deliver immediate results in pilot areas while creating a sustainable foundation for nationwide improvement.”
The ICIR reports that the Federal Ministry of Power and NERC will finalise pilot details in the coming months, prioritising DisCos with acute operational deficits. The initiative marks the most robust effort to date to resolve the power distribution crisis, signalling a renewed push for accountability, investor confidence, and reliable electricity access.
An earlier report by The ICIR noted that due to persistent liquidity in the power sector and poor performance of the distribution companies in the power sector value-chain, the Ministry of Finance Incorporated (MOFI) has restructured and taken control of the government’s 40 per cent equity holding in the 11 privatised successor electricity distribution companies (DISCos).
The MOFI is the investment vehicle of the Nigerian government, domiciled with the Federal Ministry of Finance.
Before now, the Bureau of Public Enterprise (BPE) has maintained such control of the government’s 40 per cent.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.