LunagisthubFG’s Proposed Sale of 11 Discos: What You Need to Know
The Federal Government of Nigeria may sell the 11 power distribution companies (Discos) through a re-privatization process if the Electricity Act (Amendment) Bill, 2025, becomes law. This bill, sponsored by Senator Enyinnaya Abaribe, aims to overhaul the 2023 Electricity Act by addressing regulatory gaps and improving investment in the sector.
Fresh Capital Injection: The bill requires core investors in the 11 Discos to inject fresh capital within 12 months or face stiff regulatory actions.
Regulatory Actions:The Nigerian Electricity Regulatory Commission (NERC) can impose sanctions, including share dilution, receivership, or outright re-privatization, on defaulting Discos.
Empowering NERC:The bill empowers NERC to compel Discos to recapitalize and manage their entities efficiently.
Re-privatization:If passed, the bill could lead to the re-privatization of the 11 Discos, potentially changing their ownership structure.
Critics argue that the bill poses a serious threat to the country’s newly decentralized electricity market and could reverse key reforms achieved under the landmark Electricity Act of 2023 .
The Federal Government’s objective is to attract new investments and improve the efficiency of the Discos. By selling the Discos to new investors, the government hopes to increase the sector’s performance and reduce its debt burden.
The proposed sale of the 11 Discos is a significant development in Nigeria’s electricity sector. While the bill aims to improve investment and efficiency, its implications on the sector’s structure and performance remain to be seen. The outcome will depend on the legislative process and the government’s ability to balance the interests of various stakeholders ².
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