BREAKING: Nigeria Begins Overhaul of Electricity Distribution Sector with Pilot Scheme for Two Discos

The federal government has begun moves to reform and revitalise Nigeria’s electricity distribution sector, starting with a pilot overhaul of two underperforming Distribution Companies (Discos).

The move followed a comprehensive assessment of systemic challenges plaguing the Discos, including governance gaps, infrastructure deficits, and commercial inefficiencies.

Minister of Power, Chief Adebayo Adelabu, disclosed the plan on Monday in Abuja after a meeting with the Japanese International Cooperation Agency (JICA), which presented a roadmap titled, “Revamping of the Distribution Sector in Nigeria.”

According to a statement by the minister’s Special Adviser on Strategic Communications and Media Relations, Mr.  Bolaji Tunji, the pilot scheme, slated to commence between May and August 2025, will target one Disco in the North and another in the South.

The scheme aimed to demonstrate a replicable model for operational turnaround, combining internal restructuring, external expertise, and federal oversight to achieve rapid improvements in service delivery.

JICA’s proposal emphasised 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, stating, “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.”

He 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.

Adelabu said key to the initiative was resolving the Discos’ inability to invest in infrastructure upgrades.

He stated, “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 in viable and the not so viable areas to capable operators, so we can have a mix.”

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 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.

JICA’s proposal, developed after the minister’s earlier visit to Japan’s energy market, underscored a “holistic approach” to revamping distribution, including proactive government-JICA collaboration and measurable milestones.

JICA’s Power Sector Policy Advisor to Nigeria, Takeshi Kikukawa, acknowledged during the presentation, “The goal is to deliver immediate results in pilot areas while creating a sustainable foundation for nationwide improvement.”

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 power distribution crisis, signalling a renewed push for accountability, investor confidence, and reliable electricity access.