FG Accuses DisCos Of Frustrating Power Sector Reforms
The Federal Government has accused Electricity Distribution Companies (DisCos) of sabotaging efforts to reform Nigeria’s power sector, warning that their persistent underperformance threatens recent gains in generation and transmission.
The Minister of Power, Chief Adebayo Adelabu, raised his concerns during a two-day retreat organised by the Senate Committee on Power.
In a statement released on Tuesday by his Special Adviser on Strategic Communication and Media Relations, Mr. Bolaji Tunji, the Minister lamented that DisCos have become the weakest link in the power value chain.
He said, “We need to get tough with the DisCos, as they can easily frustrate all the gains we have made. They have disappointed us in performance expectations. Whatever we do in generation does not mean anything to consumers if it is frustrated at the distribution points”.
He noted that in 2003, restructuring of the sector, the DisCos were supposed to have technical partners, but many of them showed partnership with foreign companies for that purpose, which lasted for about three month.
“So, we need utility companies that can invest in the sector to improve infrastructure, improve service. A lot of them went to the banks to take loans to buy the assets, after taking over, instead of providing infrastructure, they are taking out the money to pay the loans”, Adelabu said.
According to the Minister, despite tariff adjustments that boosted market liquidity by 70 per cent, raising sector revenue from ₦1tn in 2023 to ₦1.7tn in 2024, the distribution segment remains the weakest link.
“In the fourth quarter of 2024, DisCos in the North remitted just ₦124.4bn (30 per cent) of their ₦408.86bn invoice, with Abuja DisCo accounting for 85 per cent of Northern payments. Southern DisCos fared slightly better, remitting ₦254.6bn (67 per cent), though 70 per cent of this came from Lagos DisCos alone.
“These discrepancies are due largely to crumbling infrastructure outside economic hubs, where underinvestment has left networks dilapidated”, the minister lamented.
Adelabu noted that the metering gap, a key driver of revenue loss and consumer distrust, underscores systemic neglect.
He added that the government has launched a ₦700bn Presidential Metering Initiative (PMI) and a World Bank-backed program targeting 4.3 million meters by 2025, noting that 75,000 units were deployed in April 2024 while additional 200, 000 is expected in May.
“Closing this gap is fundamental to fair billing and financial sustainability,” the Minister acknowledged, “but we are not there yet due to underinvestment and operational inefficiencies.”
“The sector also faces a ₦4tn subsidy backlog owed to generation companies, including ₦1.94tn for 2024 alone. With monthly subsidy shortfalls now hitting ₦200bn, he said.
The Minister warned that maintaining current tariffs is “unsustainable.”
“To salvage the sector, we will soon embark on restructuring underperforming DisCos and tightening enforcement of performance benchmarks.
“However, without urgent capital injection into distribution networks, gains in generation, including a historic 6,003MW output in March 2025—and transmission upgrades, such as 61 new transformers deployed in 2024, will fail to translate to a reliable household supply”, Adelabu said.
The Minister also spoke of plans to boost power supply in the Northern part of the country.
“We are looking at developing the Makurdi hydropower project, which is about 1000 megawatts. We also want to revitalise Kaduna thermal plants, which have been abandoned for the past five years.
“It is a 215 megawatt capacity plant and is presently at about 87 per cent completion. Efforts are presently on to restore this power plant,” the minister said.
Adelabu said the state government has expressed interest in taking over the Katsina wind farm with an installed capacity of 10 megawatts.
“The state government has expressed a desire to take this up with some private investors, and we have commissioned a feasibility study to concession the farm, which had been abandoned for a while”, Adelabu said.
FG Accuses DisCos Of Frustrating Power Sector Reforms is first published on The Whistler Newspaper
