Energy and Power
House indicts Discos over worsening power condition
By Saint Mugaga
The House of Representatives Ad hoc Committee investigating Nigeria’s power sector reforms and expenditure from 2007 to 2024 has accused electricity distribution companies of crippling Nigeria’s power supply system.
The committee said they have some so through years of poor investment, inadequate expansion and failure to meet obligations outlined in their original business plans.
Speaking during a hearing on Wednesday, the Chairman of the committee, Hon. Ibrahim Almustapha Aliyu said most distribution companies had misled the government at the point of acquisition, presenting impressive business plans but failing to deploy the required resources to upgrade substations, transformers and distribution networks more than a decade after privatisation.
He expressed shock that despite claims by the Transmission Company of Nigeria (TCN) that it can wheel up to 8,000 megawatts, the DisCos continue to take only about 4,000 megawatts due to limited infrastructure, a problem he said is self-inflicted.
According to him, the power distribution firms have “Refused to invest, refused to expand and refused franchising options,” thereby creating the conditions for energy theft, meter bypassing, and consumer apathy across the country.
“You have caused this problem because you could not expand from what you inherited,” he said.
“For 13 to 14 years now, if you had made the necessary investments, substations, up-to-date transformers, proper network expansion, there would be no issue. You would uptake more energy, the cost would be lower, and Nigerians would be happy.”
He noted that many consumers resort to illegal connections because they are billed monthly for electricity that is either not supplied or grossly inadequate.
“How do you expect someone whose monthly bill equals his salary to keep paying? People will look for alternatives. And your refusal to invest has contributed to this unholy attitude of bypassing and stealing energy,” he said.
The committee chairman reminded the DisCos that Nigerians enjoyed better supply under the defunct NEPA/NITEL-era systems in some areas and expected significant improvements after private investors took over the assets.
He further challenged the DisCos to reconcile their earlier claims of competence and financial capacity with their current inability to meet tariff obligations, network expansion expectations, and service delivery benchmarks.
Chief Regulatory and Compliance Officer of Kaduna Electric, Dr. Mahmood Abubakar said about 60 per cent of electricity supplied nationwide is subsidised, a situation the company said has continued to weaken investor confidence and limit the ability of distribution companies (DisCos) to make the necessary capital investments.
He said during the hearing that only about 40 per cent of electricity, largely consumed by Band A customers, is cost-reflective, while the rest depends heavily on government subsidy that is often delayed or unpaid.
According to him, the current subsidy structure distorts billing, revenue collection, and the ability of DisCos to expand infrastructure more than a decade after privatisation.
“If we go strictly by the multi-year tariff order, about 60 percent of the energy consumed in Nigeria is subsidised by the government. Only Band A pays the reflective tariff. Even then, we have Band A feeders recording up to 80 per cent energy losses due to theft and bypasses, making full recovery impossible,” he said.
Abubakar explained that because DisCos cannot recover their full revenue requirement, they cannot secure investments or loans needed to upgrade their networks.
He added that the delay in the payment of subsidies affects the entire value chain, particularly affecting generation companies’ ability to pay for gas, thereby affecting power production.
“The subsidy is not forthcoming as and when due. It comes whenever government decides to pay. That is the reality, and it affects everyone.
“We cannot pay our market invoices fully, the Gencos cannot fulfil firm contracts with gas suppliers, and the whole chain is weakened,” he said.
By Our Reporter
Nigeria has cancelled the remaining $717.7 million World Bank loan to boost the county’s power sector, ending a major electricity recovery programme earlier than planned as the country struggles to improve electricity supply and rising financial pressure in the sector.
The World Bank and Nigeria reportedly agreed to discontinue the funding arrangement after key reform targets failed.
The cancelled funds were part of the Power Sector Recovery Performance-Based Operation introduced to improve electricity supply, strengthen the finances of the sector and support reforms across the industry.
Initially approved in 2020 with about $752.5 million in funding, in 2023, the World Bank added another $763.5 million to deepen reforms and address long-standing problems in the sector. Combined, the programme was valued at about $1.52 billion.
However, the latest restructuring document showed that the additional financing struggled to meet major conditions required for disbursement. The World Bank said no further payments would be made under the programme after the cancellation of the undisbursed balance.
The bank also moved the project’s closing date from June 2027 to May 2026, effectively ending the operation ahead of schedule.
According to the report, Nigeria’s electricity sector still faces deep structural problems despite years of reforms and intervention funds. The bank identified weak distribution networks, transmission bottlenecks, poor revenue collection and mounting tariff shortfalls as some of the major issues affecting the sector.Nigerian debt analysis
The World Bank noted that the situation worsened after the liberalisation of the foreign exchange market in 2023, which caused a sharp depreciation of the naira and increased the cost of gas used for power generation.
It explained that over 70 per cent of electricity supplied to the national grid depends on gas priced in United States dollars. At the same time, electricity tariffs remained largely unchanged for most consumers, creating a wide gap between operating costs and revenues generated in the sector.
The report stated that tariff shortfalls rose from N140 billion in 2022 to about N1.9 trillion in both 2024 and 2025, putting fresh pressure on government finances.
The World Bank further disclosed that only about nine per cent of the additional financing package had been disbursed before the cancellation. It described the implementation progress under the programme as “Moderately Unsatisfactory.”
We recall Joe Ajaero, NLC president’s recent interview in which he said Nigeria’s electricity lacked the critical strategic planning and the infrastructure to buoy it for effective, steady and improved power supply.
He pointed out that no matter the funds been applied to it, there would be no good story would ever come from it without addressing the core variables.
Energy and Power
Court Sentences ex-Power Minister, Saleh, 75 years in Absentia Over N22 bn projects
By Our Reporter
Amidst declaring him a fugitive, Justice James Omotosho of the Federal High Court, has sentenced former Minister of Power, Saleh Mamman, to 75 years in prison for corruptly embezzling funds meant for the Mambilla and Zungeru hydroelectric power projects.
The trial judge on Wednesday found Mamman guilty on a 12-count charge and held that the prison terms would run consecutively, bringing the total sentence to 75 years.
Justice Omotosho further ordered that the jail term would begin from the day the convict is arrested.
The judge also directed all security agencies to arrest Mamman wherever he is found.
The court equally ordered that all monies and properties recovered from the former minister be forfeited to the Federal Government, while directing him to refund the outstanding balance from the alleged N22bn linked to the Mambilla and Zungeru hydroelectric power projects.
The case had lingered for years before the judge finally decided to sentence the alleged culprit in absentia.
By Our Correspondent
The privatisation of power in Nigeria has been described as grand deception of Nigerian people by government according to the Nigeria Labour Congress (NLC), president, Comrade Joe Ajaero.
Speaking at National Union of Electricity Employees’ (NUEE) 2026 annual conference of women and youth in Abuja, the NLC leader accused the government of creating slush funds ahead of the 2027 elections, using the proposed N2tn to N3tn bailout for power generation companies as a ‘ruse’.
Comrade Ajaero, averred that over a decade after the unbundling of the power sector, electricity generation had remained stagnant at between 4,000 and 5,000 megawatts, “the same level as before privatisation.
“A decade after the much-celebrated privatisation, what do we have? Instead of progress, we witness regression. Instead of light, we have darkness.
“The national grid collapses with the frequency of a faulty generator, sometimes plunging the entire nation into blackout. This is not the turnaround we were promised; this is a well-orchestrated robbery of the Nigerian people.”
Ajaero accused distribution companies of persistently rejecting allocated loads from the Transmission Company while Nigerians grappled with frequent grid collapses and soaring tariffs.
The labour leader criticised the privatisation
of the Power Holding Company of Nigeria (PHCN) successor firms as a fraudulent transfer of public wealth to investors who entirely lacked both the technical capacity and financial strength to manage the power assets.
“The so-called investors did not bring fresh capital into this country. They borrowed heavily from Nigerian banks, draining domestic credit and worsening pressure on the naira.
“They acquired DISCOs and GENCOs on a shoestring budget and now expect Nigerian workers to pay for their loans through outrageous electricity tariffs.”
Ajaero further frowned at the band classification system, which categorises consumers into Bands A, B and C based on hours of supply, saying it had become a backdoor mechanism for tariff hikes.
“Band A consumers pay through their noses but still receive epileptic power supply. This government is asking Nigerians to pay for darkness. Banding is the institutionalisation of extortion.
“Electricity is a right, not a commodity to be auctioned to the highest bidder while the poor are left in the dark.”
On the Federal Government’s plan to pay between N2tn and N3tn to generation companies as subsidy arrears, the NLC said there was no justification for “such a massive bailout to private firms that have failed to deliver.”
“The electricity subsidy claim remains a phantom. That N3tn is another ruse and goes nowhere. We see this as a clandestine move to settle the boys as the 2027 elections approach. Every kobo of the treasury belongs to the workers and people of Nigeria.”
The NLC insisted that electricity must be restored as a social service, arguing that no country had successfully run its power sector purely as a profit-driven enterprise without imposing hardship on citizens.
“It is only the State that can bear the huge capital investment required and the long gestation period for returns. The private sector has failed. It is time to take back the power for the people,” he stated.
While acknowledging the provisions of the new Electricity Act that devolved power generation and distribution to states, warned that decentralisation alone would not solve the structural challenges plaguing the sector.
The labour body called for a national stakeholders’ summit comprising workers’ unions, manufacturers and experts to develop what it termed a “People’s Power Roadmap” focused on affordable and stable electricity, public investment in generation and transmission infrastructure, service-reflective tariffs and a reversal of the privatisation model.
“The Nigerian people cannot continue to pay for darkness. When power is not available, it cannot be affordable. Power must be returned to the people,” Ajaero added.
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