There have been incessant calls for full privatisation of Nigeria’s power sector to promote industry-wide strategic planning that will be aligned with the national industrial aspiration of the country to become the factory for West and Central Africa and beyond within five years and a newly industrialised country within a decade, as well as an export-led growth.
Nigeria’s power market is projected to be worth approximately USD 408.45 million in 2025, rising to an estimated USD 503.67 million by 2030, at a compound annual growth rate (CAGR) of about 4.28 per cent.
This market reflects the economic, demographic, and infrastructural dynamics of Africa’s most populous nation. With rapid industrial development and urbanisation, Nigerians face persistent electricity shortages, driving an urgent need for more stable and widespread power solutions.
Despite an installed capacity in the region of 13,000-13,500 MW, actual generation continuously operates at only about one‐third of capacity, largely due to ageing infrastructure, vandalism, and gas supply constraints. Although thermal (gas‐fired) plants account for the bulk of generation, hydro stations remain a significant part of the energy mix, especially in the northern regions.
Thermal power-primarily gas‐fired-is expected to remain the backbone of Nigeria’s electricity supply over the medium term.
The country holds large gas reserves, and gas plants currently contribute around 86 per cent of capacity. However, frequent gas shortages, fuel theft, and logistical bottlenecks continue to hamper consistent generation.
Growth in urban centres and light manufacturing steadily increases energy needs. As urbanisation accelerates, electricity demand is projected to rise, propelling investment in both grid‐based and off‐grid power sources.
Distributed power generation (DPG) – including mini‐grids, captive power plants, and solar home systems – is creating new opportunities. With the national grid unreliable and often operating below capacity, many urban and rural users are pivoting to decentralised solutions.
However, the news that the Bureau of Public Enterprises (BPE) is considering listing two electricity distribution companies (discos) and one generation company (genco) on the Nigerian Exchange (NGX), has been received with mixed reactions.
According to Ayodeji Gbeleyi, Director General of the BPE, the exercise would involve the federal and state governments’ residual 40 per cent and 30 per cent stakes in the respective power firms.
While declining to name the companies due to what he described as the “sensitivity of the matter,” the BPE chief noted that the move would allow Nigerians participate in the ownership of critical power infrastructure, while helping to strengthen corporate governance and transparency in the sector.
“We intend to drive shared prosperity and inclusiveness by listing part of the FGN/States’ 40 per cent/30 per cent residual shares in certain Discos and a Genco on the stock exchange,” Gbeleyi said, noting that the decision marks a shift toward market-driven ownership and corporate governance reforms.
The initiative is part of the Bureau’s broader strategy to support President Tinubu’s Renewed Hope Agenda — focused on unlocking value from public assets, driving private investment, and accelerating job creation. Gbeleyi said the Bureau is targeting ₦312.3 billion in revenue for 2025 through 15 strategic transactions, including six revenue-generating and nine reform-based projects.
So far in 2025, BPE has raised ₦170.74 billion, buoyed by the successful concession of the Zungeru Hydropower Plant (₦101.5 billion) and the Afam III Fast Power project (₦53.92 billion). However, other transactions — such as the sale of coal blocks, non-core telecom assets, and hydropower concessions — remain either underperforming or in progress.
Experts and analysts consider privatisation of all government public assets in the power sector as an absolute necessity and inevitability, if the country desires a relatively quick and cost-effective turnaround in the Nigerian power sector.
Experts have called for 100 per cent divestment or selling of all public sector equity interests in the power generating companies (GenCos) and power distribution companies (DisCos) and the Transmission Company of Nigeria (TCN) or its successor companies, Nigerian Independent System Operator Ltd (NISO) and the Transmission System Provider (TSP), and/or the appointment of a concessionaire or management contractor to run and manage the transmission companies, NISO and TSP and similarly the appointment of concessionaires to manage the hydropower dams on a public private partnership (PPP) bases.
Analysing the trend while offering solutions, Mr Igbinoba, a Team Lead/CEO at ProServe Options Consulting, Lagos, gave a good example of a fully privatised national power sector with the United Kingdom.
According to report published by Igbinoba, Its numerous power generating companies, six power distribution companies called Distribution Network Operators (DNOs) and three Transmission Network Operators (TNOs) are all privatised and privately owned and operated. In addition there are various Offshore Transmission Operators (OFTOs) and various Interconnection Operators (IOs) – all privately owned.
Of note also is that most of Britain’s power assets are owned by foreign investors from France, Spain, Germany Qatar, United States and Canada, among others.
However, on October 1, 2024, the United Kingdom government nationalised the National Grid plc Electricity System Operator (National Grid Plc ESO) and created a new publicly owned National Energy System Operator (NESO) with the key objectives of supporting the government’s energy security plan, reduce electricity bills in the long term and drive the achievement of UK’s decarbonisation or clean energy goals. The new entity is to serve as the independent system operator and planner (ISOP) and is to among other things coordinate electricity and gas network planning. However, it should be noted that National Grid Plc, which is a private business entity, remains the operator of the national grid backbone, the physical transmission asset or transmission infrastructure owned by the three Transmission Network Operators (TNOs). Thus, the UK government or the newly nationalised NESO does not own any power transmission assets.
“However, it should be noted that National Grid Plc, which is a private business entity, remains the operator of the national grid backbone, the physical transmission asset or transmission infrastructure owned by the three Transmission Network Operators (TNOs).”
He recalled that the November 2013 privatisation exercise was partially done, involving 100 per cent of the shares of the power generating companies (GenCos) and 60 per cent of the shares of the power distributing companies (DisCos), excluding the Transmission Commission of Nigeria (TCN) and the 10 National Independent Power Plants (NIPPs) in the Niger Delta jointly owned by the three tiers of government.
He noted that full privatisation of the DisCos through selling the 40 per cent of their equity currently being held by the three tiers of government on the stock exchange through an Initial Public Offer (IPO) will solve the present liquidity problem of the DisCos.
They will then be able to raise short-term funds in the money market for their cash flow requirements and mobilise long-term capital for expansion and upgrade of their infrastructure, thereby minimising Aggregate Technical Commercial and Collection (ATC&C) Losses.
Igbinoba, went on to explain that full privatisation of the power sector will send the right signal for both domestic and foreign direct investment (FDI) to flow into the sector as Governments (federal, state, and local) do not have the enormous financial resources in terms of tens of billions of dollars or more required to re-equip, expand, and refire the power sector.
Also, the power sector privatisation will save the federal government trillions of naira of budgetary allocation every year that can better be deployed elsewhere, promote accountability, transparency, and improved governance in the power sector and enhance value for money, ensure timely completion of projects, minimise cost overruns, and eliminate waste.
It will further accelerate power generation and enable tens of thousands of megawatts (MW) to be generated by many private power plants/independent power plants within a relatively short period of time and provide the billions of dollars needed to expand the transmission backbone.
The exercise is fully consummated will enable industry-wide strategic planning that will be aligned with the national industrial aspiration of Nigeria to become the factory for West and Central Africa and beyond within five years and a newly industrialised country within a decade, as well as an export-led growth strategy that within ten years will dethrone oil and gas as the leading foreign exchange earner for Nigeria. Private sector commitment, efficiency, resources, and resourcefulness will ensure that the strategic plan is not just aspirational but ambitious and yet realisable.
“Privatisation will enable Nigeria to take timely advantage of the rapidly closing window of opportunity for financial and investment flows for fossil fuel projects, specifically, in Nigeria’s case, gas investments and investments in gas-fired power stations. Although gas is our adopted transition fuel or energy, we have been very slow in investing in gas-fired turbines for power generation, primarily because of the poor business environment for private sector investment in the power sector and the ingrained or literal visceral hostility towards privatisation in the power sector.” Igbinoba added.
In addition privatisation will enable the Nigerian power sector to fire on all cylinders and trigger an industrial revolution or manufacturing renaissance and boost our gross domestic product (GDP) growth rate to 7-8 per cent or possibly double digits and breathe life into President Bola Ahmed Tinubu’s aspiration for a trillion-dollar Nigerian economy by 2030.
Meanwhile, the Bureau’s focus remains on creating a more efficient and competitive public enterprise landscape. “For us at the BPE, we have indeed set sail on re-engineering the reform and privatisation of public enterprises, one transaction at a time,” the DG said.
Established in 1999 as the Secretariat of the National Council on Privatisation under the Public Enterprises Act, the BPE has since completed 243 transactions. Of these, 109 public entities have been either fully or partially privatized or commercialized, while 91 remain untouched — including Nigeria’s refineries, airports, railways, and steel complexes.
Gbeleyi defended the overall impact of privatisation on Nigeria’s economy, citing measurable gains in sectors such as telecoms, maritime, pensions, and power. He pointed to Nigeria’s telecom revolution, which has grown from 400,000 active lines under NITEL to over 169 million subscribers today, with the sector contributing 14.4 per cent to GDP.
In the pensions sector, reforms have boosted Assets Under Management to ₦24.63 trillion as of June 2025, with more than 10.7 million Retirement Savings Accounts registered. In the ports, private terminal operations have cut cargo dwell times from 30 days to 7–14 days and attracted billions in investment since the 2006 port concessions.
On the power sector, Gbeleyi acknowledged the mixed results of previous reforms. Average electricity generation rose to 5,366mw in Q1 2025, up from 3,432mw in 2013.
Revenue collection across Discos climbed to ₦553.6 billion, aided by a reduction in government subsidies and an expanded metering rollout — over 6.4 million meters installed by March 2025, compared to just 403,000 in 2013.
Yet, challenges persist, including aggregate Technical, Commercial and Collection (ATC&C) losses which remain at 39.1 per cent, down from 55 per cent pre-reform – still far from acceptable levels. “The trajectory is positive, but we must do more,” Gbeleyi noted.
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