The Minister of Power, Adebayo Adelabu, announced at the opening ceremony of the three-day inaugural Nigerian Electricity Supply Industry (NESI) Market Participants and Stakeholders Roundtable (NMPSR) in Abuja that the Federal Government will not renew licensing agreements for under-performing electricity distribution and generation companies in Nigeria.
He expressed concern that even after a decade since the privatization of the power sector in November 2013, these operators have not met the intended objectives. Adelabu emphasized that licenses for operators who have failed to meet expectations will not be renewed.
Adelabu stated, “Ten years have passed since the initial licensing, and the time for renewal has come. However, renewal will not be automatic. Any privatized companies that have not lived up to expectations will have their licenses revoked. We need to assess whether they have complied with the terms and conditions of their licenses.”
He also highlighted that in many countries, the electricity supply value chain, from generation to transmission to distribution, is not privatized, but Nigeria has taken this approach. He called for collective efforts from all stakeholders to work towards achieving industry priorities and objectives.
Adelabu urged a comprehensive assessment of the technical capacities of the generation and distribution companies (GenCos and DisCos), as well as their financial capabilities. He stressed the need to evaluate the investments made since obtaining the license, infrastructure improvements, and reductions in AT&C losses based on the initial agreements.
In November 2013, the Nigerian power sector was privatized, resulting in the establishment of six power generation plants and 11 electricity distribution companies.
