Electricity Act Boosts 16 State Markets, Attracts $2bn Investments – Adelabu

Nigeria’s power sector is undergoing a dramatic transformation under President Bola Tinubu’s Renewed Hope Agenda, with the Electricity Act 2023 driving the activation of 16 state electricity markets and attracting over $2 billion in fresh investments, the minister of Power, Adebayo Adelabu, announced on Thursday.

Speaking at the commissioning of the Nigeria Electricity Liability Management Company (NELMCO)’s new headquarters, Adelabu said that sweeping reforms—including policy overhauls, market liberalisation, and institutional strengthening—that are boosting efficiency, generation capacity to 14 gigawatts, and sector revenue by 70 per cent while slashing government liabilities by N700 billion.

Adebayo Adelabu said the reforms, anchored in policy overhaul, market liberalisation and institutional strengthening, are repositioning the sector for sustainability, efficiency and increased private-sector participation.

The minister described the ongoing changes as deliberate steps to build a viable and investor-friendly electricity market.

Central to the reform drive, he noted, is the Electricity Act 2023, which has enabled the sector’s decentralisation and opened the door to subnational participation. This, he said, has already led to the activation of 16 state electricity markets, while also stimulating competition and innovation within the industry. He added that the development of a National Integrated Electricity Policy, the first in over two decades, now provides a unified framework for implementing the Act, strengthening coordination between federal and state governments and accelerating access to reliable and affordable electricity.

Adelabu further disclosed that the reforms have attracted over $2 billion in fresh investments into the sector, while ongoing efforts to transition the industry towards full commercialisation have significantly improved its financial outlook. According to him, sector revenue grew by 70 per cent in 2024, while government liabilities were reduced by about N700 billion, reflecting improved efficiency and cost recovery mechanisms.

The Minister also pointed to improvements in generation capacity, which has increased from 13 gigawatts to 14 gigawatts, alongside record operational milestones, including a peak generation of 5,801.44 megawatts. He said the government is addressing the long-standing metering gap through the Presidential Metering Initiative, backed by N700 billion mobilised through the Federal Account Allocation Committee and an additional $500 million World Bank facility, with procurement processes already underway to deliver millions of meters nationwide.

As part of the broader reforms, Adelabu revealed that Nigeria has successfully synchronised its national grid with those of other ECOWAS countries following a four-hour uninterrupted test run. He said the development underscores the growing stability and technical capacity of the nation’s electricity system and signals readiness for expanded regional power exchange.

He described the commissioning of NELMCO’s new headquarters as more than the unveiling of a building, noting that it represents a reinforcement of the institutional and financial backbone required to sustain the reform process. The Minister commended the agency for its role in stabilising the sector, disclosing that it has reduced inherited liabilities from N2.303 trillion to N146.76 billion and delivered over N700 billion in savings to the federal government through rigorous verification and reconciliation processes.

He added that NELMCO has also significantly reduced ground rent claims from N644 billion to N41.8 billion and achieved a 45 per cent reduction in post-privatisation liabilities owed by Ministries, Departments and Agencies to electricity distribution companies, further strengthening liquidity and investor confidence in the Nigeria Electricity Supply Industry.

Adelabu maintained that the reforms are anchored on building a transparent, sustainable and commercially viable power sector capable of supporting economic growth, adding that the progress recorded so far reflects the government’s commitment to delivering reliable electricity to Nigerians.