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The Nigerian federal government has introduced a significant initiative aimed at reforming the country's electricity distribution sector, beginning with a pilot program for two underperforming Distribution Companies (DisCos).
Special adviser for strategic communications and media relations to the minister of power, Bolaji Tunji,announced in a statement from Abuja on Monday that the pilot project will focus on the two poorly performing DisCos.
The minister of power, Adebayo Adelabu, revealed the plan following a meeting with the Japanese International Cooperation Agency (JICA), which presented a roadmap entitled ‘Revamping of the Distribution Sector in Nigeria.’
Tunji noted that JICA's proposal was created after the minister's previous visit to Japan’s energy market and highlighted a “holistic approach” to revising the distribution sector, emphasizing proactive collaboration between the government and JICA along with defined milestones.
According to Adelabu, the pilot scheme is set to commence between May and August, selecting one DisCo from the North and another from the South.
He remarked, “the federal government has initiated significant reforms to rejuvenate Nigeria’s electricity distribution sector, beginning with a pilot overhaul of two underperforming Distribution Companies (DisCos).”
This action follows a thorough evaluation of the systemic issues affecting the DisCos, such as governance shortcomings, infrastructure deficiencies, and commercial inefficiencies.
The minister pointed out that the reform of the DisCos aims to create a model for operational recovery that incorporates internal reorganization, external expertise, and federal oversight to facilitate quick improvements in service delivery.
He explained that JICA’s proposal focuses on reforming DisCos “from within.”
“By bringing in external experts, enhancing leadership, and synchronizing government support with short-term results in pilot regions, we can establish a foundation for long-term transformation across the sector,” he explained.
Adelabu emphasized the urgency of this intervention, stating that the government could no longer passively observe the shortcomings of DisCos, which consistently underperform.
“This pilot is not negotiable; we will leverage regulatory authority to restructure underperforming DisCos and enforce compliance if necessary,” he said.
The minister acknowledged the ongoing resistance to previous reforms but committed to tackling both widespread challenges like vandalism and governance issues.
He also mentioned that the government would work on addressing region-specific challenges, including cultural barriers affecting operations. “A key initiative will be tackling the DisCos’ failure to invest in infrastructure upgrades. Their lack of investment stems not only from reluctance but also due to insufficient incentives. Returns on infrastructure investments are inadequate, so we must draw in investors and allocate viable and less profitable areas to capable operators for a balanced approach,” he stated.
Adelabu instructed the Nigeria Electricity Regulatory Commission (NERC) to facilitate franchising opportunities and ensure the cooperation of the DisCos. “NERC must secure their participation. Previous attempts failed because of resistance, but this time we will be deliberate and firm,” he said.
The minister also stressed the importance of public education to clarify the roles of generation, transmission, and distribution entities.
He noted that many Nigerians still perceive the sector as a singular entity, and educating consumers is essential to fostering trust and backing for these reforms.
Adelabu mentioned that the Ministry of Power and NERC would finalize pilot details in the upcoming months, focusing on DisCos with severe operational shortcomings.
According to him, this initiative represents the most ambitious effort thus far to address the power distribution challenges, indicating a renewed commitment to accountability, investor confidence, and reliable electricity access.
During the presentation, Takeshi Kikukawa, JICA’s power sector policy advisor to Nigeria, stated that the aim is to deliver immediate outcomes in pilot regions while establishing a sustainable basis for nationwide improvement.
