Federal Government Announces Major Overhaul of Electricity Distribution Companies, Begins Pilot Scheme with Two DisCos
The Federal Government has begun moves to initiate sweeping reforms to revitalise the electricity distribution sector, starting with a pilot overhaul of two underperforming Distribution Companies (DisCos).
In a statement on Monday, the Minister of Power ‘s Special Adviser on Strategic Communications and Media Relations, Mr. Bolaji Tunji said that the move follows a comprehensive assessment of systemic challenges plaguing the DisCos, including governance gaps, infrastructure deficits, and commercial inefficiencies.
The pilot scheme, slated to commence between May and August, this year, will target one DisCo in the North and another in the South.
After a meeting with the Japanese International Cooperation Agency (JICA), which presented a roadmap titled, “Revamping of the Distribution Sector in Nigeria” thr Minister, Chief Adebayo Adelabu explained that the move is to demonstrate a replicable model for operational turnaround, combining internal restructuring, external expertise, and federal oversight to achieve rapid improvements in service delivery.
JICA’s proposal emphasises reforming DisCos “from within” by integrating outside experts, strengthening leadership, and aligning government support with short-term results in pilot zones to lay the groundwork for long-term sector-wide transformation.
Adelabu stressed the urgency of the intervention, stating: ‘We can no longer fold our hands and watch the inadequacies of DisCos whose performances fall short of expectations. This pilot is not optional—we will use regulatory authority to restructure underperforming DisCos and compel compliance if necessary’.
He acknowledged persistent resistance to past reforms but vowed to address both universal challenges such as vandalism and governance, and region-specific issues, including cultural barriers hindering operations.
Key to the initiative is resolving the DisCos’ inability to invest in infrastructure upgrades, he said.
The Minister further said: ‘Their lack of investment is not solely due to unwillingness but also a lack of incentives. Returns on infrastructure spending are not commensurate, so we must attract investors and franchise viable and the not so viable areas to capable operators, so we can have a mix’.
He directed the Nigeria Electricity Regulatory Commission (NERC) to enforce franchising opportunities and ensure DisCos’ cooperation, noting: ‘NERC must secure their buy-in. Past efforts failed due to resistance, but this time, we will be intentional and decisive’.
Adelabu also highlighted the need for public education to clarify the roles of generation, transmission, and distribution entities. ‘Many Nigerians still view the sector as a single entity. Educating consumers is critical to building trust and support for these reforms’, he added.
JICA’s proposal, developed after the Minister’s earlier visit to Japan’s energy market, underscores a “holistic approach” to revamping distribution, including proactive government-JICA collaboration and measurable milestones.
JICA’s Power Sector Policy Advisor to Nigeria, Takeshi Kikukawa noted during the presentation: ‘The goal is to deliver immediate results in pilot areas while creating a sustainable foundation for nationwide improvement’.
According to the statement, the Federal Ministry of Power and NERC will finalise pilot details in the coming months, prioritising DisCos with acute operational deficits.
The initiative marks the most robust effort to date to resolve power distribution crisis, signalling a renewed push for accountability, investor confidence, and reliable electricity access.
