The Federal Government has announced that sweeping reforms in Nigeria’s power sector are beginning to produce measurable results, with improvements recorded across the electricity value chain.
The reforms, implemented under the Renewed Hope Agenda of Bola Tinubu, have attracted more than $2bn in fresh investment while reducing government liabilities in the sector to N146bn.
The Minister of Power, Adebayo Adelabu, disclosed this on Thursday in Abuja during the inauguration of the new headquarters of the Nigeria Electricity Liability Management Company (NELMCO).
Adelabu described the development as a critical milestone in strengthening the financial and institutional framework of the country’s electricity industry.
According to him, the commissioning of NELMCO’s new headquarters symbolises renewed commitment to stabilising the power sector and sustaining the ongoing reform process.
“The commissioning of NELMCO’s new headquarters is more than the unveiling of a building. It represents a reinforcement of the institutional and financial backbone required to sustain the reform process,” the minister said.
He commended NELMCO for significantly reducing inherited liabilities from N2.303tn to N146.76bn and delivering over N700bn in savings to the Federal Government through rigorous verification and reconciliation processes.
The minister further revealed that the agency reduced ground rent claims from N644bn to N41.8bn and achieved a 45 per cent reduction in post-privatisation debts owed by Ministries, Departments and Agencies to electricity distribution companies.
Adelabu noted that these efforts have improved liquidity within the sector and boosted investor confidence.
He attributed the progress to reforms anchored on policy overhaul, market liberalisation and institutional strengthening, which he said are repositioning the sector for sustainability and increased private sector participation.
Central to the reform drive is the implementation of the Electricity Act 2023, which has decentralised the electricity market and created opportunities for states to participate directly in electricity generation and distribution.
The minister explained that the law has already led to the activation of 16 state electricity markets, encouraging competition and innovation in the industry.
Adelabu also highlighted the development of a National Integrated Electricity Policy—the first in over two decades—which provides a unified framework for coordinating electricity reforms between federal and state governments.
According to him, the reforms have also driven strong financial improvements within the sector, with revenue rising by about 70 per cent in 2024 while government liabilities declined by roughly N700bn.
“These are clear indicators that efficiency is improving and cost recovery mechanisms are working,” he said.
On operational performance, Adelabu said Nigeria’s generation capacity has increased from 13 gigawatts to 14 gigawatts, with a peak generation of 5,801.44 megawatts recently recorded.
He also disclosed that the government is addressing Nigeria’s long-standing metering gap through the Presidential Metering Initiative, supported by N700bn mobilised through the Federal Account Allocation Committee and an additional $500m facility from the World Bank.
Procurement processes are currently underway to deliver millions of meters to households and businesses across the country.
Adelabu further revealed that Nigeria recently achieved synchronisation of its national grid with those of other ECOWAS countries after a successful four-hour uninterrupted test run.
He said the achievement demonstrates growing technical capacity and positions Nigeria to expand regional electricity trade within the West African power market.
Despite the progress, the minister acknowledged that Nigeria’s power sector still faces significant challenges, including gas supply constraints and infrastructure limitations.
Nigeria’s electricity industry has long struggled with liquidity problems, weak infrastructure and poor revenue collection, even after the 2013 privatisation of generation and distribution assets.
While the latest reforms have generated optimism, analysts say sustained policy consistency, improved gas supply and continued investment will be necessary to achieve stable electricity supply nationwide.
The reform update comes amid increasing public frustration over persistent power outages across the country.
Earlier this week, Adelabu apologised to Nigerians for the disruptions affecting homes, schools and businesses.
“I want to apologise to Nigerians for this temporary issue that is leading to hardship,” he said, explaining that the outages were largely caused by gas supply constraints and infrastructure challenges during the dry season when electricity demand typically rises.
The minister, however, assured citizens that efforts are underway to restore stable power supply, expressing confidence that improvements will begin to emerge within the coming weeks.
