- The federal government introduces new capital adequacy rules under its power sector reform agenda.
- ₦4 trillion bond launched to clear verified debts and boost liquidity.
Nigeria’s power sector reform is entering a decisive phase with a new financial rule for electricity Distribution Companies (DisCos). The Federal Government has introduced a capital adequacy requirement to strengthen the financial health of all licensed operators.
The Minister of Power, Chief Adebayo Adelabu, announced this during the Nigeria Energy Forum in Lagos, themed “Powering Nigeria through Investment, Innovation, and Partnership.”
Adelabu stated that the directive aims to tackle undercapitalisation and the rising debt burden within the power distribution network. As licence renewals approach, companies must meet strict capital standards to retain their operating rights. Consequently, the measure will boost liquidity, improve service delivery, and rebuild investor confidence.
Since assuming office in 2023, Adelabu has driven legislation, infrastructure, and local content development reforms. He highlighted the Electricity Act 2023 as a milestone, granting 15 states regulatory autonomy. In addition, the recently approved Integrated National Electricity Policy represents Nigeria’s first comprehensive power framework in almost two decades.
According to the minister, the federal government’s power sector reform aims to create a fair, competitive, and investment-driven electricity market. Tariff reforms now support cost-reflective pricing for specific consumer categories, which has improved revenue and service reliability. As a result, revenue collection grew by 70 per cent, reaching ₦1.7 trillion in 2024, and could exceed ₦2 trillion in 2025.
Furthermore, President Bola Tinubu approved a ₦4 trillion bond to clear verified debts owed to generation companies and gas suppliers. The government is also developing a targeted subsidy scheme to protect vulnerable households while sustaining market stability.
Adelabu added that Phase One of the Presidential Power Initiative will add 7,000MW to the national grid. He said generation capacity increased from 4,200MW in 2023 to 5,300MW in 2024, driven by NIPP plant rehabilitation and the 700MW Zungeru Hydropower Plant. Additionally, ₦700 billion has been secured to install 1.1 million meters by 2025.
To strengthen operations, the Transmission Company of Nigeria has been unbundled into the Nigerian Independent System Operator (NISO) and the Transmission Service Provider (TSP).
Adelabu called on investors to explore Nigeria’s 10GW stranded generation potential. Unlocking this capacity could power industries, create jobs, and expand African electricity exports.