The Nigerian Government has issued a directive instructing the Nigerian Electricity Regulatory Commission (NERC) to revoke licenses of underperforming electricity distribution companies (DISCOs). The government accused the DISCOs of failure to enhance supply despite the availability of power on the national grid.
During a meeting with the heads of the NERC, on Monday in Abuja, Minister of Power, Adebayo Adelabu, emphasized that the distribution segment remains the weakest link in the electricity supply chain.
Adelabu urged NERC to explore innovative methods to compel DISCOs to enhance supply, including imposing stringent sanctions on utilities that fail to utilize their allocations and potentially cancelling licenses.
He highlighted the excessively large franchise areas covered by the DISCOs and proposed a restructuring plan to create smaller DISCOs, each serving a single state.
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The Minister emphasized the critical importance of improving distribution, stating that without adequate distribution, the government’s efforts in generation and transmission would be futile.
He stressed that the ongoing electricity rationing across the country is unacceptable and disclosed plans to increase power generation from 4,000MW to 6,000MW within the next six months. This would be achieved by settling significant debts owed to power generation companies and gas suppliers.
Adelabu outlined the government’s intention to continue electricity subsidies in the short term but gradually phase them out over the next three years, transitioning the sector towards commercially driven tariffs.
