The Federal Government of Nigeria has issued licenses to 17 Independent Electricity Distribution Networks operators, with 10 of them currently in operation. This announcement was made in the 2022 Market Competition Report released by the Nigeria Electricity Regulatory Commission (NERC), a federal agency.
The report provides insight into Nigeria’s power distribution segment, which is a vital component of the country’s power sector, consisting of electricity generation, transmission, and distribution. In 2013, the Nigerian power sector was unbundled into these three segments, resulting in the creation of 11 successor distribution companies that were subsequently privatized, despite some consumer complaints.
According to the 2022 Market Competition Report, all 11 successor Discos (distribution companies) have been privatized, with ownership and management transferred to private investors. Additionally, a private distribution company has been licensed in a specified franchised area, while 17 Independent Electricity Distribution Networks operators have been granted licenses, and as of December 2022, 10 of them are operational.
The NERC clarified that the report aligns with Section 24(2) of the Electric Power Sector Reform Act 2004, which mandates the commission to prepare an annual report for the minister regarding the potential for competition in the Nigerian Electricity Supply Industry.
The report serves as a review of the level of competition in the Nigerian Electricity Supply Industry (NESI) and assesses the progress toward transitioning to a more competitive market. It also offers recommendations for transitioning to a more competitive market, as per Section 26 of the Electric Power Sector Reform Act (EPSRA).
The report’s intended audience includes government officials and institutions, the private sector, energy economists, engineers, financial and market analysts, potential investors, as well as general readers, providing valuable insights into the state of competition within Nigeria’s electricity distribution sector.