FG to Penalise Underperforming DisCos, GenCos, Says Power Minister
The Federal Government has announced plans to penalise underperforming electricity distribution companies (DisCos) and generation companies (GenCos) as part of measures to improve power supply and support Nigeria’s industrialisation.
The Minister of Power, Joseph Olasunkanmi Tegbe, disclosed this in a policy brief presented by his Special Adviser, Martins Olajide, at the Nigerian Economic Summit Group (NESG) Industrialisation and Competitiveness Forum on Wednesday.
Tegbe said the ministry would introduce performance scorecards for power sector staff, DisCos and GenCos, with rewards for excellence and penalties for poor performance.
According to him, the scorecards would strengthen accountability across the electricity value chain and ensure that operators are held to clearly defined performance standards.
The minister also proposed tariff reforms aimed at protecting vulnerable consumers while ensuring that electricity supply obligations are met across the value chain.
He said the measures were part of an eight-point agenda designed to stabilise the power sector, restore market discipline and strengthen governance.
Tegbe said Nigeria currently has 13,625 megawatts (MW) of installed grid capacity, but average daily electricity availability is only about 4,854MW, leaving approximately 62 percent of installed capacity idle.
He noted that the situation was particularly concerning given that Nigeria’s realistic peak electricity demand is estimated at about 20,000MW.
“The power arithmetic does not add up,” Tegbe said.
The minister said the wide gap between available electricity and demand had forced households and businesses to increasingly rely on self-generation.
According to him, Nigerians spent an estimated N16.5 trillion on self-generated electricity in 2023, compared with about N1 trillion in revenue generated by the national grid.
Citing World Bank estimates, Tegbe said inadequate electricity supply costs Nigeria about $25 billion annually, equivalent to between five and seven per cent of the country’s gross domestic product.
He said improving the performance of electricity operators and reforming the tariff system would be critical to creating a more reliable electricity market capable of supporting industrial productivity.
Tegbe added that the government would implement measures to strengthen the electricity value chain and improve the utilisation of existing infrastructure.
He said the ministry planned to enhance the Lagos, Enugu-Port Harcourt and Abuja-Kaduna-Kano transmission corridors, with Lagos serving as a proof of concept for the wider grid stabilisation programme.
The minister said the government would also work to reduce commercial and technical losses while expanding electricity metering programmes.
He added that the government would optimise generation and transmission assets through targeted economic clusters and corridors to improve asset utilisation, attract investment and strengthen electricity supply across the country.