- The Federal Government plans to introduce a Minimum Capital Requirement for DisCos to strengthen liquidity and improve service delivery.
- Through the Minimum Capital Requirement for DisCos and broader reforms, Nigeria aims to build a stable and transparent electricity market.
The Federal Government of Nigeria will soon enforce a Minimum Capital Requirement for DisCos as part of the 2028 licence renewal. Minister of Power, Adebayo Adelabu, announced this at the Nigeria Energy Exhibition and Conference in Lagos.
He explained that the new rule would boost electricity distribution companies‘ financial stability and liquidity. Many firms face undercapitalisation and rising debt, limiting their efficiency and service delivery.
Adelabu stressed that poor performance among DisCos has slowed progress in Nigeria’s power sector. Therefore, the government will not renew the licences of companies that fail to prove financial strength, technical ability, and accountability. He urged operators to improve their performance or replace their faces.
In addition, the minister confirmed that the government is deepening power sector commercialisation. The goal is to improve liquidity, investor confidence, and operational efficiency. Recent tariff reforms have introduced cost-reflective pricing for certain consumers, increasing reliability and reducing industry energy costs.
As a result, sector revenue rose by 70% to ₦1.7 trillion in 2024. Projections show it could exceed ₦2 trillion in 2025.
President Bola Tinubu has approved a ₦4 trillion bond to clear verified debts owed to generation and gas suppliers to stabilise the market. At the same time, a targeted electricity subsidy is being prepared to protect vulnerable Nigerians and maintain affordability during the shift to full commercialisation.
Adelabu also highlighted closer cooperation between the Nigerian Electricity Regulatory Commission (NERC) and state regulatory bodies. This partnership aims to strengthen enforcement and ensure accountability.
He noted that the Electricity Act 2023 has empowered 15 states to regulate subnational electricity markets, marking a significant step towards decentralisation.
Moreover, the government is advancing reforms focused on legislation, infrastructure development, and renewable energy. Under the Presidential Power Initiative (PPI), more than 700MW of transmission capacity has been added. The integration of the 700MW Zungeru Hydropower Plant has raised national generation to 5,300MW.
Finally, Adelabu reaffirmed the government’s commitment to partnerships and sustainable investment. He said Nigeria’s stronger market fundamentals, clear policy direction, and political will make the power sector increasingly attractive to investors.