The Federal Government has launched a major initiative to reform Nigeria’s electricity distribution sector, beginning with a pilot overhaul of two underperforming Distribution Companies (DisCos). In a statement issued on Monday in Abuja, Mr. Bolaji Tunji, Special Adviser on Strategic Communications and Media Relations to the Minister of Power, said the pilot scheme will focus on one DisCo in the North and another in the South.
The move marks the beginning of broader efforts to address longstanding inefficiencies in the power distribution value chain. The initiative follows a strategic meeting between the Minister of Power, Mr. Adebayo Adelabu, and officials of the Japanese International Cooperation Agency (JICA), who presented a roadmap titled “Revamping of the Distribution Sector in Nigeria.” The roadmap was developed after Adelabu’s earlier visit to Japan’s energy market and outlines a comprehensive approach to transforming Nigeria’s power distribution landscape.
According to Adelabu, the pilot programme—scheduled to commence between May and August—aims to serve as a model for sector-wide reform by integrating internal restructuring, external technical expertise, and strict federal oversight.
“The Federal Government has begun steps to implement sweeping reforms to revitalise the electricity distribution sector,” the minister said. “This pilot is not optional—we will use our regulatory authority to restructure underperforming DisCos and compel compliance where necessary.”
Adelabu identified several key challenges hampering the sector, including governance failures, weak infrastructure, and poor commercial performance. He stressed the urgency of the reforms and the government’s resolve to no longer tolerate the substandard performance of DisCos.
JICA’s proposal, he explained, focuses on reforming DisCos “from within” by introducing qualified external experts, strengthening leadership structures, and aligning government support with clearly defined short-term goals.
He also noted the persistent resistance to previous reform efforts but assured that this initiative would be different. “We are ready to tackle both universal problems like vandalism and region-specific challenges, including cultural issues that hinder operations,” Adelabu said.
A key objective of the overhaul is to resolve the DisCos’ inability to invest in critical infrastructure. According to the minister, many of the companies are constrained not by unwillingness, but by inadequate incentives. “Returns on infrastructure investments are not attractive, so we must bring in investors and create franchising opportunities. Some areas can be franchised to capable operators to balance viability and service delivery,” he stated.
To support this, Adelabu has directed the Nigerian Electricity Regulatory Commission (NERC) to enforce franchising models and ensure DisCo cooperation. “NERC must secure their buy-in. We failed in the past due to resistance, but this time we will be intentional and decisive,” he said.
The minister also stressed the importance of public education in the reform process, noting that many Nigerians still view the electricity sector as a single entity. He said educating consumers on the distinct roles of generation, transmission, and distribution companies would help build trust and support for ongoing reforms.
In the coming months, the Ministry of Power and NERC will finalise the details of the pilot programme, prioritising DisCos with the most severe operational deficiencies.
Adelabu described the initiative as the government’s most robust attempt yet to address the country’s electricity distribution crisis, signaling a renewed commitment to transparency, investor confidence, and improved electricity access.
Also speaking at the meeting, Mr. Takeshi Kikukawa, JICA’s Power Sector Policy Advisor to Nigeria, said the goal is to deliver immediate, tangible improvements in pilot areas while laying a sustainable foundation for long-term transformation across the country.
