The Federal Government has described the performance of electricity distribution companies in the Nigerian Electricity Supply Industry, NESI, as disappointing.
Minister of Power Adebayo Adelabu, who stated this at a two-day retreat organised by the Senate Committee on Power, noted the DisCos have been frustrating the efforts by the government to improve power supply.
A statement by the Special Adviser, Strategic Communication and Media Relations to the Minister, Bolaji Tunji said Adelabu spoke on the persistent crisis threatening to derail progress in the sector which is chronic underinvestment in distribution infrastructure, which continues to cripple service delivery nationwide in spite of landmark reforms in the electricity sector.
The minister revealed glaring disparities in distribution company performance, with aging networks, rampant electricity theft, and poor investment deepening reliance on unsustainable subsidies and leaving millions in darkness.
“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,” said Adelabu.
He noted that in the 2003 restructuring of the sector, the DisCos were supposed to have technical partners, but a lot of them showed partnership with foreign companies for that purpose which lasted for about three months, immediately they took over, those companies left.
“So we need utility companies that can invest in the sector to improve infrastructure, improve service,” he said, adding that, “a lot of them went to the banks to take loans to buy the assets after taking over. Instead of providing infrastructure they are taking out the money to pay the loans.”
According to the minister, despite tariff adjustments that boosted 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, DisCos in the North 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 fared slightly better, remitting ₦254.6 billion (67 percent), though 70 percent of this came from Lagos DisCos alone. These discrepancies are due largely to crumbling infrastructure outside economic hubs, where underinvestment has left networks dilapidated,” he said.
The minister explained that the metering gap, a key driver of revenue loss and consumer distrust, underscores systemic neglect, adding that the government has launched a ₦700 billion Presidential Metering Initiative (PMI) and a World Bank-backed programme targeting 4.3 million meters by 2025, 75,000 units were deployed in April 2024 while additional 200, 000 is 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 hitting ₦200 billion, the minister warned that maintaining current tariffs is “unsustainable,” straining public funds needed for infrastructure upgrades.
“To salvage the sector, we will soon embark on restructuring underperforming DisCos and tightening 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 61 new transformers deployed in 2024, will fail to translate to reliable household supply,” he said.
The minister highlighted plans to attract private investment into grid infrastructure and regionalise transmission networks to reduce failure risks, noting that the 70 percent remittance by the two DisCos in Lagos reflects better infrastructure than what obtains in the northern networks.
He called on the National Assembly to enact stricter legislation aimed at safeguarding Nigeria’s power infrastructure from acts of vandalism.
Emphasising the need for enhanced legal measures, Adelabu stressed that robust laws are critical to deterring the destruction of vital energy assets and ensuring the stability of the nation’s electricity supply.
