The Nigerian government is considering transferring its stakes in 11 power companies to state governments in an effort to strengthen oversight and address the country's persistent power shortages, the Minister of Power Adebayo Adelabu said on Friday.
According to Adelabu, the federal government is willing to exchange its power distribution companies' (DISCOs) shares for shares in the privately run Niger Delta Power Holding Co., a separate electricity company that it controls in partnership with the states and local governments.
According to Adelabu, the federal government is willing to swap its shares in the electricity distribution companies (DISCOs) for shares in the privately-owned Niger Delta Power Holding Co., a separate electricity company that is controlled in partnership with state and local governments.
"To enhance state involvement, we're exploring the idea of unbundling regional [DISCOs] into different states for more localized oversight. We're also looking into financial collaboration between federal and state governments, potentially involving a swap of stakes in DISCOs with state stakes in the Niger Delta Power Holding Company," the minister said on X (formerly Twitter).
Eleven DISCOs, each operating a franchise spanning three or more states, were privatized ten years ago. According to media reports, the federal government owns 40% of these companies.
In addition, the official called for the creation of rural electrification committees to address the country's electrification problem.
"Our vision includes active collaboration in rural electrification. I encourage states to establish rural electrification boards in coordination with our Rural Electrification Agency. State support in providing distribution transformers and replacing weak power lines is crucial for maintaining reliable power supplies," Adelabu added.
Nigeria, Africa's most populous country, despite the "notable progress in policy and regulatory measures" in the field of electricity, has the lowest access to electricity in the world, with 86 million out of the country's 200 million population still lack access to electricity as of 2021, according to the 2023 Energy Progress Report published by Tracking SDG 7, which was produced with input from international organizations, such as the World Bank, WHO and the UN.
In an attempt to address power outages in the West African country, Nigerian President Bola Tinubu approved the Electricity Bill on June 9, 2023. It seeks to unify Nigeria's electricity regulations across the value chain of the Nigerian power sector, including the incorporation of renewable energy into Nigeria's energy mix. The act also seeks to encourage private sector investment and state government involvement in the power industry.