The Federal Government has expressed strong dissatisfaction with the performance of electricity distribution companies (DisCos) in the Nigerian Electricity Supply Industry (NESI), describing their operations as disappointing and a major obstacle to national power sector reforms.
Minister of Power, Adebayo Adelabu, voiced these concerns during a two-day retreat organised by the Senate Committee on Power. He accused DisCos of frustrating government efforts to improve electricity supply despite ongoing reforms and increased investments in the sector.
According to a statement by the Minister’s Special Adviser on Strategic Communication, Bolaji Tunji, Adelabu highlighted chronic underinvestment in distribution infrastructure as a key factor crippling service delivery. He noted stark regional disparities in performance, with outdated networks, electricity theft, and poor investment undermining power supply and prolonging reliance on costly subsidies.
“We need to get tough with the DisCos,” Adelabu said. “They have disappointed us in performance expectations. Whatever we do in generation means nothing to the consumer if distribution fails.”
He further revealed that many DisCos had initially claimed partnerships with foreign technical firms during the 2003 sector restructuring, but these partnerships were short-lived. Instead of reinvesting in infrastructure, many DisCos prioritized loan repayments used to acquire assets.
Despite recent tariff adjustments boosting market liquidity and raising sector revenue from ₦1 trillion in 2023 to ₦1.7 trillion in 2024, Adelabu said the distribution segment remains the weakest link. In Q4 2024, DisCos in Northern Nigeria remitted only 30% of their market invoice, with Abuja DisCo covering the bulk of that figure. Southern DisCos fared better, remitting 67%, driven mostly by those operating in Lagos.
The minister also pointed to the sector’s significant metering gap as a cause of revenue loss and consumer distrust. To address this, the government launched the ₦700 billion Presidential Metering Initiative (PMI) and a World Bank-supported programme targeting 4.3 million meters by 2025. So far, 75,000 meters were installed in April, with 200,000 more expected in May.
Adelabu warned that the current tariff regime is unsustainable, as the sector is weighed down by a ₦4 trillion subsidy backlog—including ₦1.94 trillion for 2024—and monthly shortfalls of ₦200 billion. He announced that the government would begin restructuring underperforming DisCos and intensify enforcement of performance benchmarks.
“The historic 6,003MW generation output recorded in March 2025 and recent transmission improvements will not translate into household supply without urgent capital injection into distribution,” he stressed.
Plans are also underway to regionalise the transmission network and attract private investment into grid infrastructure. Adelabu cited the better performance of Lagos-based DisCos—who remitted 70% of their market invoices—as evidence of the benefits of more robust infrastructure.
The minister concluded by urging the National Assembly to pass stronger legislation to protect energy assets from vandalism, calling it essential to the stability of Nigeria’s electricity supply.
