FG to sanction non-performing DisCos, GenCos

The Federal Government has announced plans to sanction underperforming electricity distribution and generation companies (DisCos and GenCos) while introducing tariff reforms to drive Nigeria’s industrial growth.

Minister of Power, Joseph Olasunkanmi Tegbe disclosed the initiative in a policy brief presented by his Special Adviser, Martins Olajide, during the Nigerian Economic Summit Group (NESG) industrialisation and competitiveness forum.

Tegbe explained that the ministry is rolling out performance scorecards for electricity staff, DisCos, and GenCos to reward high achievement and penalize operational failures.

The framework is designed to enforce accountability and maintain strict performance benchmarks across the power value chain.

The measures form part of a comprehensive eight-point agenda aimed at stabilizing the grid, restoring market discipline, and strengthening governance.

Alongside performance tracking, the ministry is pursuing tariff reforms crafted to protect vulnerable consumers while guaranteeing that market operators meet their supply obligations.

Highlighting significant systemic inefficiencies, Tegbe noted that Nigeria operates with 13,625 megawatts (MW) of installed grid capacity, but daily average generation sits at just 4,854MW.

This leaves roughly 62 percent of installed capacity idle, despite realistic peak demand reaching approximately 20,000MW.

The minister underscored the economic burden of this supply deficit, noting that self-generation cost Nigerians an estimated N16.5 trillion in 2023, compared to about N1 trillion in national grid revenue.

Drawing on World Bank data, he added that persistent power shortages cost the economy around $25 billion each year, representing between 5 and 7 percent of the nation’s Gross Domestic Product (GDP).

To address these challenges, the Federal Government plans to strengthen critical transmission corridors, including Lagos, Enugu–Port Harcourt, and Abuja–Kaduna–Kano, using Lagos as the initial proof of concept for the wider grid stabilization roadmap.

The strategy also includes targeted measures to curb commercial and technical losses, expand nationwide electricity metering, and optimize power assets within designated economic clusters to attract private investment.