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The Federal Government of Nigeria has announced a major new policy requiring electricity Distribution Companies (DisCos) to meet a minimum capital adequacy requirement to qualify for the renewal of their operating licenses.
Minister of Power, Chief Adebayo Adelabu, disclosed this at the Nigeria Energy Forum, emphasizing the sector’s challenges of under-capitalization and severe debt burden.
The FG aims to strengthen DisCos’ financial health and liquidity through this requirement, part of a broader reform agenda focusing on legislation, policy reforms, infrastructure development, energy transition, and local content development.
This multi-pronged approach seeks to address structural challenges, unlock private capital, and enhance service delivery.
Key achievements include the Electricity Act 2023, granting regulatory autonomy to 15 states, and the approval of the Integrated National Electricity Policy, Nigeria’s first comprehensive power sector policy in nearly two decades. Tariff policy reforms have improved supply reliability, reduced energy costs, and increased industry revenue by 70% to ₦1.7 trillion in 2024.
To stabilize the market, President Bola Tinubu has approved a ₦4 trillion bond to clear verified GenCo and gas supply debts, alongside a targeted subsidy framework. Critical infrastructure projects include the Presidential Power Initiative Phase One, adding 7,000MW of operational capacity, and the integration of the 700MW Zungeru Hydropower Plant.
The Minister appealed for investment, highlighting Nigeria’s power sector as open and ready for business, with over 10 GW of stranded generation capacity awaiting development .
