The Federal Government is to overhaul underperforming Distribution Companies (DisCos) as a measure to address the high level of inadequacies in Nigeria’s electricity distribution.
Adebayo Adelabu, Minister of Power, who disclosed this after a meeting with the Japanese International Cooperation Agency (JICA), which presented a roadmap titled ‘Revamping of the Distribution Sector in Nigeria’, said the overhaul will start with a pilot scheme of two underperforming DisCos.
JICA’s proposal emphasizes 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.
JICA’s proposal, developed after the Minister’s earlier visit to Japan’s energy market, underscores a holistic approach to revamping distribution, including proactive government-JICA collaboration and measurable milestones.
The minister said the overhaul follows a comprehensive assessment of systemic challenges plaguing the DisCos, including governance gaps, infrastructure deficits, and commercial inefficiencies.
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 pilot scheme, slated between May and August 2025, will target one DisCo in the North and another in the South. It aims to demonstrate a replicable model for operational turnaround, combining internal restructuring, external expertise, and federal oversight to achieve rapid improvements in service delivery”.
The Minister also highlighted the need for public education to clarify the roles of generation, transmission, and distribution entities.
“Many Nigerians still view the sector as a single entity. Educating consumers is critical to building trust and support for these reforms, “he added.
Adelabu acknowledged persistent resistance to past reforms but vowed to address both universal challenges—“such as vandalism and governance—and region-specific issues, including cultural barriers hindering operations.
“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.
“Nigeria Electricity Regulatory Commission (NERC) must secure its buy-in. Past efforts failed due to resistance, but this time, we will be intentional and decisive,” Adelabu said.
JICA’s Power Sector Policy Advisor to Nigeria, Takeshi Kikukawa, noted during the presentation: “The goal is to deliver immediate results in pilot areas while creating a sustainable foundation for nationwide improvement.”
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