The Nigeria Governors’ Forums stated that it intends to license new companies in the power industry’s distribution sector in order to increase the availability of electricity throughout the 36 States.
This is included in its report, which THE MATRIX can view, on electricity policy and recommendations to the federal government.
The forum suggests licensing new distribution firms (DisCos) in different regions and geopolitical zones around the nation. This is intended to increase industry efficiency and market competition.
Currently, Nigeria’s electricity distribution landscape comprises eleven DisCos across the thirty-six states and the Federal Capital Territory (FCT). Despite their private ownership and management, these DisCos operate within the auspices of the federal government.
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Meanwhile, following the enactment of the Electricity Act 2023, which grants State governors autonomy over power generation, distribution, and regulation within their respective States, the governors are pursuing approval for additional licenses to foster increased liquidity in the sector.
Under the recommendation for the development of a multi-tier electricity market, the governors aim to create a State electricity market that will be appropriate for each State.
Moreover, the market design may include energy resources within the States such as gas, hydro, wind, biomass, solar, etc, among other things.
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The State governors also suggest licensing new DisCos and creating a new business model that is suitable for each State.
“To cultivate robust competition and facilitate innovation, it is essential for States to expand the constellation of electricity providers and business models accessible within a state electricity market beyond Successor DisCos operating within the State territory.
“Consequently, States will license new players and develop new business models that would introduce more competition in both the wholesale and retail markets within their territories,” the governors said.
