The Federal Government has warned electricity distribution companies (DisCos) to improve their performance or risk losing their operating licences when they expire in 2028.
Minister of Power, Chief Adebayo Adelabu, issued the warning during a session on the power sector at the 2025 Nigerian Economic Summit held in Abuja.
Speaking at the event themed “Uninterrupted Power Supply: The Industrial Imperatives,” Adelabu said inefficiency within the distribution segment remains one of the biggest obstacles to achieving stable electricity supply nationwide.
“The distribution companies need to sit up,” Adelabu said. “They are a major bottleneck in the sector, and the government is doing everything possible to ensure they meet expectations. Their licences will expire in two years, and there will be major reforms before any renewal. Those that have not demonstrated technical expertise, financial stability, or commitment to national interest will be replaced.”
The minister also revealed that President Bola Ahmed Tinubu has approved a ₦4 trillion bond to offset verified debts owed to power generation companies (GenCos) and gas suppliers, as part of efforts to stabilize the electricity market.
“To stabilize the market, Mr. President has approved a ₦4 trillion bond to clear verified GenCo and gas supply debts. Alongside this, a targeted subsidy framework is being developed to protect vulnerable households and ensure the sector’s long-term viability,” he said.
Adelabu added that ongoing reforms would enforce stricter performance standards, expand metering coverage, and restructure ownership of DisCos where necessary to ensure consumers receive efficient and reliable service.
In separate remarks, Mr. Edu Okeke, Chief Executive Officer of Azura Power, and Mr. Philip Mshelbila, Managing Director of Nigeria LNG Limited, stressed the need for improved liquidity and efficient gas pricing to attract more investment in electricity generation.
While Okeke noted that payment issues tied to dollar-based gas pricing were not the main challenge, Mshelbila emphasized that fair and sustainable pricing would boost gas supply and strengthen Nigeria’s power generation capacity.
Stakeholders concluded that restoring efficiency and accountability within the power distribution chain is essential to achieving the country’s long-term goal of uninterrupted electricity supply.