The Federal Government, through the National Assembly, has disclosed in a draft amendment to the 2023 Electricity Act that it may sell the 11 power distribution companies through a re-privatisation process.
The Electricity Act (Amendment) Bill, 2025, currently before the National Assembly and sponsored by Senator Enyinnaya Abaribe (Abia South), seeks to overhaul the 2023 Electricity Act by addressing regulatory gaps.
The bill, if passed into law, will enforce sweeping reforms that could see core investors in electricity distribution companies lose their stakes if they fail to improve their investments within 12 months. This action follows years of poor performance and a worsening debt crisis.
The bill also gives the Nigerian Electricity Regulatory Commission powers to impose sanctions, including dilution of shares or re-privatisation, on defaulting Discos, particularly those under receivership or financial distress.
Under the new law, a comprehensive framework must be developed within 12 months to overhaul the financial structure of the Nigerian Electricity Supply Industry. The framework must focus on attracting long-term local currency investments and phasing out what the bill describes as “unstructured and regressive subsidies.”
According to Sections 228J and 228K of the amended Act, the Minister of Power, in consultation with NERC, is required to develop and implement a robust financing framework aimed at de-risking investments across the power value chain and resolving the sector’s chronic debt overhang, estimated at over N4tn.
According to Punch, the Forum of Commissioners of Power and Energy has condemned the proposed amendment bill. They warned that it seriously threatens the country’s newly decentralised electricity market and could reverse key reforms achieved under the landmark Electricity Act of 2023.
Power sector experts and consumer advocacy groups have argued that the proposed law, if passed, can only be effectively implemented if the long-standing subsidy debts crippling the sector are first cleared.
They also recommend extending the recapitalisation deadline to 24 months, similar to the approach adopted during the banking sector recapitalisation, to allow for a more realistic and structured transition.