The Ministry of Power says underperforming electricity distribution and generation companies (DisCos and GenCos) will face penalties as the Federal Government moves to improve accountability and reform the power sector.
The Minister of Power, Joseph Olasunkanmi Tegbe, disclosed this in a policy brief presented by his Special Adviser, Martins Olajide, at the 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 outstanding performance and penalties for operators that fail to meet agreed standards.
He said the scorecards would strengthen accountability across the electricity value chain and ensure operators are held to clearly defined performance targets.
The minister also proposed tariff reforms designed to protect vulnerable consumers while ensuring that electricity supply obligations are met across the value chain.
Tegbe said the measures form part of an eight-point agenda aimed at stabilising the power sector, restoring market discipline and strengthening governance.
Nigeria’s Power Supply Gap
According to Tegbe, Nigeria currently has 13,625 megawatts (MW) of installed grid capacity, but average daily availability is only about 4,854MW.
This means approximately 62 percent of installed capacity remains idle, despite the country having a realistic peak electricity demand of about 20,000MW.
“The power arithmetic does not add up,” Tegbe said.
He said the shortage between available electricity and demand had forced households and businesses to increasingly depend on self-generation.
Tegbe disclosed that Nigerians spent an estimated ₦16.5 trillion on self-generated electricity in 2023, compared with approximately ₦1 trillion in revenue generated by the national grid.
Citing World Bank estimates, he added that inadequate electricity supply costs Nigeria about $25 billion annually, equivalent to between 5 and 7 percent of the country’s GDP.
The minister said improving operator performance and reforming tariffs are therefore central to creating a reliable electricity market capable of supporting industrialisation and productivity.
FG Plans Transmission and Metering Improvements
Tegbe said the government’s wider power-sector agenda would include measures to strengthen the electricity value chain and maximise the use of existing infrastructure.
The ministry plans to improve the Lagos, Enugu-Port Harcourt and Abuja-Kaduna-Kano transmission corridors, with Lagos serving as a proof of concept for the broader grid stabilisation programme.
The government will also pursue measures to reduce commercial and technical losses while continuing programmes aimed at expanding electricity metering.
Tegbe said generation and transmission assets would be optimised through targeted economic clusters and corridors to improve their utilisation and attract new investment.
Source: Ministry of Power / NESG Industrialisation and Competitiveness Forum
