By Mathew Chima

The Ministry of Power says it will penalise underperforming distribution and generation companies (DisCos and GenCos) and implement tariff reforms to support Nigeria’s industrialisation.

Joseph Olasunkanmi Tegbe, minister of power, disclosed this in a policy brief presented by Martins Olajide, his special adviser, at the NESG industrialisation and competitiveness forum on Wednesday.

Tegbe said the ministry would introduce performance scorecards for power sector staff, DisCos and GenCos, with rewards for excellence and penalties for underperformance.

He said the scorecards would strengthen accountability across the electricity value chain and ensure operators are held to clear performance standards.

The minister also proposed tariff reforms to protect vulnerable consumers while ensuring electricity supply obligations are met across the value chain.

Tegbe said the measures form part of an eight-point agenda to stabilise the power value chain, restore market discipline, and strengthen governance.

He said Nigeria has 13,625 megawatts (MW) of installed grid capacity, but average daily availability stands at only 4,854MW — noting that about 62 percent of installed capacity is idle, despite realistic peak demand of about 20,000MW.

“The power arithmetic does not add up,” Tegbe said.

The minister said the gap between available supply and demand has pushed households and businesses towards self-generation.

Tegbe said Nigerians spent an estimated N16.5 trillion on self-generated electricity in 2023, compared with about N1 trillion in revenue generated by the national grid.

Citing World Bank estimates, the minister said inadequate electricity supply costs Nigeria about $25 billion annually, equivalent to 5 percent to 7 percent of gross domestic product (GDP).

Tegbe said addressing the performance of operators and reforming tariffs are central to creating a more reliable electricity market capable of supporting industrial productivity.

The minister said the government’s broader agenda also includes measures to strengthen the electricity value chain and improve the use of existing power infrastructure.

He said the ministry plans to enhance the Lagos, Enugu-Port Harcourt, and Abuja-Kaduna-Kano transmission corridors, with Lagos serving as a proof of concept for the wider grid stabilisation programme.

Tegbe said the government would also pursue measures to reduce commercial and technical losses and continue programmes aimed at expanding electricity metering.

The minister said the government also plans to optimise generation and transmission assets through targeted economic clusters and corridors to improve asset utilisation and attract investment.

Source: TheCable