At the 107th edition of Nextier’s Power Dialogue, energy experts have highlighted that Nigeria’s electricity sector is undergoing a historic transformation following the unbundling of the Transmission Company of Nigeria (TCN), as mandated by the 2023 Electricity Act.
The experts described the move as pivotal in ensuring transparency, market confidence, and investment readiness. It marks a crucial step toward modernising the country’s electricity grid, promoting private sector participation, and improving power delivery nationwide.
The session, hosted by The Electricity Hub and titled “Upgrading Nigeria’s Transmission Infrastructure: Exploring Opportunities for NISO and TSP post-TCN Unbundling,” was moderated by Chinedu Chidi, Special Adviser to the CEO on Corporate Communications at the Ministry of Finance Incorporated (MOFI).
The panel featured notable speakers, including Engr. Kabiru Mohammed Adamu, General Manager of Power System Planning and Development at the Nigerian Independent System Operator (NISO), and Dr Rabiu Abubakar Abba, Deputy Director and Head of Power Generation at the Bureau of Public Enterprises (BPE).
Engr. Adamu emphasised that a key outcome of the reform was the separation of TCN into two distinct entities—NISO and the Transmission Service Provider (TSP)—allowing for clearer functional mandates. He noted that previously, TCN combined market operations, system operations, and transmission services, leading to concerns over a lack of operational independence and market neutrality.
He stressed that the reform aims to build trust among market participants by creating an independent body responsible for system and market operations, ensuring compliance with grid codes and transparency in market activities.
He further explained that under the Electricity Act, NISO is tasked with three core responsibilities:
- System operations – maintaining grid reliability and stability,
- Market administration – ensuring transparent and efficient market processes,
- System planning and development – driving infrastructure growth.
Engr. Adamu acknowledged that with subnational governments now authorised to regulate electricity within their jurisdictions, there is an increased risk of fragmented infrastructure development. He highlighted the need for coordinated planning to avoid duplication, inefficiencies, and a lack of integration across the national grid.
He also addressed grid capacity constraints, particularly in regions like Kano, where limited wheeling capacity hampers industrial power delivery. He expressed optimism that ongoing reforms will ease such constraints and stimulate industrial growth.
On financing, Engr. Adamu noted that securing project funding had traditionally been a significant challenge. However, the reform focused on improving market transparency is expected to unlock private sector financing, primarily through Public Private Partnerships (PPPs).
He pointed to new investment opportunities at the subnational level to accelerate the development of power system infrastructure, especially in developing independent transmission and distribution networks enabled by the Electricity Act.
Discussing the current limitations of the Supervisory Control and Data Acquisition (SCADA) system, Engr. Adamu revealed that although efforts have been made to expand its coverage, ageing infrastructure and gaps in visibility remain.
He mentioned ongoing projects to establish a nationwide SCADA system and the deployment of Internet of Things (IoT) technology as a stopgap measure. While these IoT devices allow for real-time monitoring, they currently lack control capabilities. Notwithstanding, NISO remains optimistic about achieving full grid visibility in the near future.
BPE’s Perspective on Reform
In his opening remarks, Dr Abba stated that the Electricity Act has exposed critical gaps in the sector and offers a framework to improve efficiency and performance. He highlighted the role of smart dispatch, remote monitoring, and load forecasting in enhancing the performance of Generation Companies (GENCOs) and increasing their competitiveness.
On the reform’s credibility, Dr Abba said it could attract significant private investments if key barriers such as tariff structures and regulatory uncertainties are addressed.
He noted that BPE is working with state governments and regulators to ensure coordination and prevent duplication of efforts. This includes offering technical support, capacity-building initiatives, and helping harmonise regulations, especially as some states incorrectly assume financial gains from setting up regulatory commissions without understanding the fiscal implications.
Legislative Insights
Chinedu Chidi explained that before the 2023 Electricity Act, TCN handled transmission services, market operations, and system operations. The Act, specifically Section 15 (1) and (2), mandated the creation of NISO as an independent entity. As a result, NISO and TSP now operate as separate entities, with TCN retaining its transmission service license.
He highlighted that the unbundling initiative enhances transparency, promotes private sector participation, and encourages innovation, factors critical to attracting investment and modernising the grid.
Chinedu noted that the greater the industry’s openness to private sector participation and the creation of independently functioning entities, the more it will attract technologies and innovations, thereby enhancing the system’s effectiveness.
According to him, the sector can potentially convert the interest generated in the space into actual investments that will drive the industry forward.
He also stressed the need for states to avoid unnecessary duplication of national laws, citing the constitutional doctrine of covering the field, which precedes federal legislation in the case of conflict or overlap.
Conclusion
The 107th Power Dialogue underscored the need for stakeholders to act decisively as Nigeria’s power sector enters this transformative era. Stakeholders must now move from policy to performance, embracing transparency, strengthening institutional coordination, and aggressively pursuing private-sector investment to fully unlock the opportunities presented by the unbundling of TCN. With NISO and TSP positioned to catalyse a more efficient, reliable, and investor-ready electricity market, the time for bold, coordinated action is now.