FG To Restructure Two Underperforming DisCos, Says Minister Of Power Adebayo Adelabu

The federal government is preparing to launch a pilot reform program targeting two underperforming electricity distribution companies (DisCos) as part of a wider initiative to reform Nigeria’s power sector, according to the Minister of Power, Adebayo Adelabu.

In a statement issued by Bolaji Tunji, the special adviser on strategic communications and media relations, Adelabu outlined the initiative after a meeting with officials from the Japan International Cooperation Agency (JICA).

During the meeting, a proposed roadmap titled “Revamping the Distribution Sector in Nigeria” was presented.

Adelabu confirmed that the pilot program is expected to begin between May and August 2025, with one DisCo from the northern region and another from the southern region selected for the initiative.

The goal is to create a model for transformation that can be replicated across the country, combining internal reforms, technical expertise from external partners, and increased federal oversight.

“We can no longer fold our hands and watch the inadequacies of DisCos whose performances fall short of expectations,” Adelabu said. “This pilot is not optional—we will use regulatory authority to restructure underperforming DisCos and compel compliance if necessary.”

Adelabu highlighted that JICA’s strategy focuses on reforming the DisCos from within, with an emphasis on improving leadership and management by integrating external experts. He also stressed the need for better alignment of federal incentives with short-term service delivery goals.

While acknowledging that previous reform attempts were hindered by internal resistance, he assured that this new initiative would be both “intentional and decisive.”

He went on to identify operational inefficiencies and infrastructure vandalism as significant challenges, while also addressing deeper structural issues such as unattractive investment conditions.

Adelabu explained that the reluctance of investors to engage with the sector was not due to a lack of interest, but rather because the current returns offered by the sector were insufficient.

“We must attract investors and franchise viable and struggling areas to capable operators,” he said.

He directed the Nigerian Electricity Regulatory Commission (NERC) to spearhead the franchising initiative and ensure that the DisCos actively collaborate in the process.
“NERC must secure their buy-in. Past efforts failed due to resistance. That won’t be the case this time.”

The minister also highlighted the need to enhance public understanding of the power sector’s structure.

“Many Nigerians still see the sector as a single entity. We must educate consumers on generation, transmission, and distribution roles if we want their trust and support.”

Takeshi Kikukawa, JICA’s power sector policy advisor to Nigeria, stated that the agency aims to achieve measurable improvements in the selected pilot areas, while also setting the stage for long-term national reforms.

According to Tunji, both the Ministry of Power and NERC will finalize the DisCos to be included in the pilot scheme in the coming months, with a particular focus on those facing significant operational challenges.