The Federal Government has described the performance of electricity distribution companies (DisCos) in the Nigerian Electricity Supply Industry (NESI) as disappointing.
Minister of Power, Adebayo Adelabu, made this remark at a two-day retreat organised by the Senate Committee on Power, highlighting how DisCos have frustrated government efforts to improve power supply.
According to a statement from Bolaji Tunji, Special Adviser on Strategic Communication and Media Relations to the Minister, Adelabu addressed the ongoing crisis threatening progress in the sector—chronic underinvestment in distribution infrastructure—that continues to undermine service delivery nationwide despite significant reforms in the electricity sector.
The minister revealed significant disparities in DisCo performance, noting that aging networks, widespread electricity theft, and inadequate investment have increased dependence on unsustainable subsidies and left millions without power.
“We need to get tough with the DisCos, as they can easily frustrate all the gains we have made. They have disappointed us in performance expectations. Whatever we do in generation does not mean anything to consumers if it is frustrated at the distribution points,” Adelabu said.
He added that during the 2003 sector restructuring, DisCos were expected to have technical partners, often foreign companies, but these partnerships typically lasted only about three months before the partners exited.
“We need utility companies that can invest in the sector to improve infrastructure and service,” he said. “Many of them took loans to buy the assets, but instead of investing in infrastructure, they use the funds to repay those loans.”
Despite tariff adjustments that increased market liquidity by 70 percent—raising sector revenue from ₦1 trillion in 2023 to ₦1.7 trillion in 2024—the distribution segment remains the weakest link.
In the fourth quarter of 2024, northern DisCos remitted just ₦124.4 billion (30 percent) of their ₦408.86 billion invoice, with Abuja DisCo accounting for 85 percent of northern payments. Southern DisCos performed better, remitting ₦254.6 billion (67 percent), though 70 percent of this came from Lagos DisCos alone. These differences are largely due to deteriorating infrastructure outside economic hubs, where underinvestment has left networks in poor condition, he explained.
Adelabu highlighted the metering gap as a key factor driving revenue loss and consumer distrust, pointing to systemic neglect. The government has launched a ₦700 billion Presidential Metering Initiative (PMI) and a World Bank-supported programme aiming to install 4.3 million meters by 2025. So far, 75,000 meters were deployed in April 2024, with an additional 200,000 expected in May.
“Closing this gap is fundamental to fair billing and financial sustainability,” the minister acknowledged, “but we are not there yet due to underinvestment and operational inefficiencies.”
The sector also faces a ₦4 trillion subsidy backlog owed to generation companies, including ₦1.94 trillion for 2024 alone. With monthly subsidy shortfalls now reaching ₦200 billion, the minister warned that maintaining current tariffs is “unsustainable,” putting strain on public funds needed for infrastructure upgrades.
“To salvage the sector, we will soon restructure underperforming DisCos and tighten enforcement of performance benchmarks. However, without urgent capital injection into distribution networks, gains in generation—including a historic 6,003MW output in March 2025—and transmission upgrades, such as the 61 new transformers deployed in 2024, will not translate into reliable household supply,” he said.
The minister also outlined plans to attract private investment into grid infrastructure and to regionalise transmission networks to reduce failure risks. He noted that the 70 percent remittance rate by two Lagos DisCos reflects better infrastructure compared to the northern networks.
Finally, Adelabu called on the National Assembly to enact stricter laws to protect Nigeria’s power infrastructure from vandalism. He stressed that robust legal measures are crucial to deterring the destruction of vital energy assets and ensuring the stability of the nation’s electricity supply.
