Lagos, Nigeria — October 28, 2025
The Federal Government has announced a new policy requiring electricity Distribution Companies (DisCos) to meet a minimum capital adequacy threshold before renewing their operating licences, as part of sweeping reforms to stabilize and modernize Nigeria’s power sector.
The Minister of Power, Chief Adebayo Adelabu, made the announcement while delivering the keynote address at the Nigeria Energy Forum held at the Landmark Centre, Lagos, themed “Powering Nigeria through Investment, Innovation, and Partnership.”
Adelabu said the new policy was aimed at addressing “the under-capitalization of several DisCos and the sector’s severe debt burden.”
> “As the tenure of their operational licenses approaches renewal, the government intends to introduce a minimum capital adequacy requirement as part of the license renewal process, to strengthen the financial health and liquidity position of the utilities,” he explained.
The minister noted that the government has adopted a multi-pronged reform strategy since 2023, focusing on legislation, policy reform, infrastructure development, energy transition and access expansion, and local content development to reposition the sector for sustainability and growth.
Highlighting the Electricity Act 2023 as a “foundational milestone,” Adelabu revealed that 15 states had already gained regulatory autonomy, with one fully operational subnational electricity market. He also announced the approval of the Integrated National Electricity Policy, the first comprehensive power sector policy in nearly two decades.
On market stabilization, the minister disclosed that President Bola Ahmed Tinubu had approved a ₦4 trillion bond to clear verified debts owed to generation companies (GenCos) and gas suppliers. He said the move would be complemented by a targeted subsidy framework designed to protect vulnerable households while sustaining market viability.
Adelabu said ongoing tariff reforms have improved revenue and supply reliability, noting that industry revenue rose by 70 percent to ₦1.7 trillion in 2024, and is projected to exceed ₦2 trillion in 2025.
Providing infrastructure updates, he confirmed that contracts for Phase One of the Presidential Power Initiative (PPI) have been signed to add 7,000 megawatts (MW) of operational capacity to the national grid.
He said Nigeria’s average generation capacity increased from 4,200MW in 2023 to 5,300MW in 2024, aided by the integration of the 700MW Zungeru Hydropower Plant and rehabilitation of NIPP plants expected to unlock an additional 345MW.
The minister also announced that ₦700 billion had been secured to deploy 1.1 million meters under the Presidential Metering Initiative by the end of 2025.
He added that the Transmission Company of Nigeria (TCN) had been unbundled into two entities — the Nigerian Independent System Operator (NISO) and the Transmission Service Provider (TSP) — marking a “long-awaited structural reform” in the power sector.
Appealing to local and international investors, Adelabu emphasized that Nigeria’s power sector “remains open and ready for business more than ever before,” with over 10GW of stranded generation capacity representing untapped opportunities.
> “Our market fundamentals are improving, our policy environment is clear, and the national leadership is committed to creating the enabling conditions for long-term investment and innovation,” he said.
He referenced South Africa’s $25 billion transmission grid expansion as a model for private-sector-led investment, contrasting it with Nigeria’s $2.3 billion Siemens-led Presidential Power Initiative.
The minister concluded with a call for partnerships to unlock Nigeria’s energy potential and drive economic growth through reliable, sustainable electricity supply.
