The 2023 Electricity Act was widely expected to catalyse long-overdue reform in Nigeria’s underperforming power sector. Central to the Act is the objective of stimulating policy measures capable of attracting sustained private investment across the electricity value chain. Over two years post-enactment, a fair question arises: Is there real momentum towards achieving this objective?
While a definitive verdict is premature, the changes observed in the market and emerging trends since the Act’s enactment suggest a structural shift away from the inefficiencies of the past. Most notably, the sector has seen a significant change in ownership of key power companies.
Although discussions around some of the recent acquisitions predate the Electricity Act and were precipitated mainly by the inability of first-generation investors to service dollar-denominated acquisition loans with naira-denominated revenues, the calibre of the new investors and the confidence they project deserve attention.
Some of these investors have publicly credited the current administration with restoring market confidence. This raises the question: which policy signals are driving renewed private sector appetite? It could be the cumulative effect of reforms such as the transition to cost-reflective tariffs and the decentralisation of the power sector, as well as ongoing conversations that have yielded more recent interventions, such as the decisive activation of the Presidential Power Sector Debt Reduction Plan.
In 2023 alone, the market saw the acquisition of a 60 per cent equity stake in Abuja Electricity Distribution Company and Kano Electricity Distribution Company by a Transcorp-led consortium and Future Energies Africa, respectively. These acquisitions followed the defaults by the core legacy investors, the Kann-led consortium, and Sahelian Power SPV Limited on their 2013 acquisition financing.
Indeed, industry analysts have long attributed the post-privatisation underperformance of many Distribution Companies (DisCos) to the limited technical and financial capacity of these legacy investors.
What appears to be emerging is a wave of acquisitions by experienced power sector players with established track records within the Nigerian electricity market, seeking to deepen their footprint or achieve operational efficiencies through vertical integration. Transcorp, for instance, is widely regarded as a strong performer in the generation segment.
Following its acquisition of the Ughelli Power Plant in 2013, it increased the plant’s available capacity by over 200 per cent within four years. Transcorp’s recent entry into the distribution segment signals an attempt to leverage its technical and operational expertise to address long-standing ‘last mile’ inefficiencies.
This trend continued in 2024 with the acquisition of a 60 per cent equity stake in Kaduna Electricity Distribution Company Plc (KAEDCO) by ASI Engineering Limited, an engineering firm with operations across Europe, Asia and Nigeria.
In a press release, KAEDCO described the acquisition as a “demonstration of faith” in the administration’s Renewed Hope Agenda, a language that underscores the role of policy confidence in investment decisions.
By 2025, market-driven acquisitions had begun emerging. MA’AM Energy Limited’s acquisition of a 95 per cent equity stake in Amperion Power Distribution Company Limited, the majority shareholder in Geregu Power, was interpreted as evidence of growing confidence in the sector and the “maturation of indigenous energy investors”.
With existing stakes across electricity generation, trading and marketing, MA’AM’s recent acquisition may better position it to manage cash-flow disruptions that typically arise when revenues fail to move smoothly through the market’s payment waterfall.
Around the same period, Transgrid Enerco Limited completed its acquisition of a 60 per cent equity stake in Eko Electricity Distribution Company (EKEDC). At the deal signing ceremony, the transaction was, amongst other things, framed as a reflection of renewed investor confidence.
The composition of the Transgrid Enerco consortium, which brings together players in hydro generation, gas infrastructure, and renewable energy, suggests a deliberate strategy to address structural weaknesses in the value chain that originate at the distribution level.
The consortium’s stated ambition to increase EKEDC’s distribution capacity from 513MW to 1,500MW further underscores its intended focus on infrastructure development and enhanced service delivery.
With these major transactions concluded, expectations are naturally shifting towards 2026. Early performance indicators from DisCos, such as KAEDCO, suggest operational improvements following the recent acquisition. Does this mark the beginning of a genuine turnaround for the power sector, or is this simply another cyclical reallocation of assets?
For years, the Nigerian Government has indicated its intention to divest its residual 30 per cent and 40 per cent equity stake in GenCos and DisCos. With growing interest from more technically and financially capable private investors, could the conditions now be right for that long-discussed exit to gather momentum?
As decentralisation deepens through the establishment of state-level electricity markets and the creation of subsidiary distribution companies, the question remains whether these reforms will translate into broader participation, deeper capital pools and, ultimately, improved service delivery.
The recent wave of investments suggests cautious optimism, but the actual test lies in whether confidence can be sustained and converted into long-term infrastructure development across the power sector. As we look ahead through 2026, the industry’s focus must shift from the ‘who’ of ownership to the ‘how’ of operational efficiency and service delivery.