The Federal Government has announced it will not renew the licences of electricity distribution companies (DisCos) that fail to meet performance standards when their licences expire in 2028.
Minister of Power, Adebayo Adelabu, disclosed this during the Nigerian Economic Summit 2025 in Abuja, where he highlighted the urgent need for reforms to end the country’s long-standing electricity supply issues.
“The distribution companies need to sit up. They are a major bottleneck in the sector, and the government is doing everything possible to ensure they meet expectations,” Adelabu said.
He emphasized that only DisCos demonstrating good faith, technical competence, financial strength, and commitment to national interests will be allowed to continue operations beyond 2028.
The Minister also pledged a comprehensive metering drive to ensure every household is metered within the next three to five years, signaling a strong push for efficiency and transparency in power distribution.
Tackling the N4 Trillion Power Debt
Adelabu addressed the sector’s financial woes, revealing President Tinubu has approved a N4 trillion bond to clear verified debts owed to power generation companies (GenCos) and gas suppliers. This is part of broader efforts to stabilize the power market.
Additionally, the government is crafting a targeted subsidy framework to protect vulnerable households while working toward full commercialization of the power industry.
Industry Voices Call for Improved Liquidity and Investment
At the summit, industry leaders also weighed in:
- Edu Okeke, CEO of Azura Power, downplayed concerns about gas payments in dollars instead of naira, noting that liquidity challenges are the more pressing issue.
- Philip Mshelbila, Managing Director of Nigeria LNG Limited, stressed that appropriate gas pricing is crucial to attract investment in gas production for power generation.
What’s Next?
With just two years remaining before DisCos licences expire, the government’s firm stance signals major reforms ahead to improve electricity supply reliability and restore investor confidence in Nigeria’s power sector.
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