The Electricity Act (Amendment) Bill 2025 currently before the National Assembly, and which has been challenged by both the Labour Unions and States Electricity Regulatory Authorities, is targeting with withdraw Private ownership stakes in underperforming Electricity Distribution Companies (DisCos).
The Government is poised to take a firmer stance on the country’s struggling electricity distribution companies, with a proposed amendment to the Electricity Act threatening to revoke private ownership stakes in underperforming Discos unless they urgently recapitalise.Underperforming
The Electricity Act (Amendment) Bill 2025—currently before the National Assembly—seeks to empower the Nigerian Electricity Regulatory Commission (NERC) to sanction defaulting distribution companies through share dilution, receivership, or outright reprivatisation.
Sponsored by Senator Enyinnaya Abaribe (Abia South), the Bill has already passed second reading and is gaining momentum amid increasing frustration over the sector’s poor performance.
The amendment Bill represents a significant overhaul of the 2023 Electricity Act and introduces a 12-month deadline for core investors in the 11 successor Discos to inject fresh capital or risk losing control.
It also mandates the Federal Government, through the Ministry of Power and in consultation with NERC, to establish a comprehensive financing framework to attract long-term local currency investments and phase out unstructured subsidies plaguing the sector.
According to the Bill, the proposed recapitalisation is part of a broader effort to resolve the electricity sector’s estimated ₦4 trillion debt overhang and improve service delivery in a market long criticised for inefficiency and underinvestment.
The 11 affected companies include Abuja, Benin, Eko, Enugu, Ibadan, Ikeja, Jos, Kaduna, Kano, Port Harcourt and Yola Electricity Distribution Companies. Many of these firms have been placed under NERC-supervised receivership and have failed to meet the performance benchmarks established during the 2013 privatisation.
In May, Power Minister Adebayo Adelabu expressed disappointment in the performance of the Discos, despite “trillions of naira sunk into the sector” through interventions, bailouts and reforms.
“We can no longer tolerate excuses,” he said. “If you can’t invest, give way to those who can.”
The proposed amendment gives NERC sweeping powers to compel core investors to recapitalise within a 12-month period after the bill is enacted. Should they fail to comply, the Commission can enforce sanctions ranging from dilution of shares to the full-scale reprivatisation of the affected companies.
While the draft legislation has received support in some quarters, it has also sparked concern. The Forum of Commissioners of Power and Energy warned the proposed law could disrupt Nigeria’s recently decentralised electricity market and reverse the gains of the 2023 Act.
Power sector analysts have also argued that recapitalisation alone won’t resolve the industry’s woes unless long-standing subsidy debts are first cleared. Some have suggested a more realistic 24-month window for recapitalisation, echoing the Central Bank’s approach during the banking reforms of the mid-2000s.
The amendment outlines a roadmap that includes recapitalisation under NERC’s supervision, fiscal incentives to attract investment, and a clear determination of federal and state equity stakes in the Discos. It also calls for a more transparent and cost-reflective tariff regime to allow operators to recover investments without overburdening consumers.
SOURCE: orientalnewsng com
