How has energy privatisation fared 13 years on?

On November 1, 2013, the federal authorities formally handed over its state-run energy technology and distribution belongings to personal buyers. What was billed as a defining second, a decisive break from a long time of bureaucratic stagnation, infinite blackouts, and the deadweight of public monopoly has, nonetheless, left a sore style within the mouth; BENJAMIN UMUTEME writes.

On November 1, 2013, the federal authorities handed over the successor firms of the Power Holding Company of Nigeria (PHCN) to personal house owners. It was billed as a decisive break from a long time of blackouts and public monopoly. The promise was easy: non-public capital, market self-discipline and an finish to the diesel and petrol turbines that hum behind most Nigerian houses and factories.

Thirteen years on, the decision from households and factories is blunt. The nationwide grid collapsed repeatedly in early 2026, provide nonetheless struggles to clear 5,000 megawatts (MW), and the debt strangling the sector has grown sooner than the reforms meant to remedy it.

How we received right here

The street to 2013 started in 2005, when the Electric Power Sector Reform Act dissolved the outdated state monopoly and created the Nigerian Electricity Regulatory Commission (NERC). The belongings had been unbundled into six technology firms (GenCos), 11 distribution firms (DisCos) and the Transmission Company of Nigeria (TCN).

The Nigerian Bulk Electricity Trading Plc (NBET) was set as much as purchase energy from turbines and re-sell it to the DisCos.

The Bureau of Public Enterprises ran the sale. When the handover got here, the GenCos and DisCos went to personal buyers, whereas TCN, the only community that strikes all energy from plant to distributor, stayed in authorities’s palms. That cut up would show decisive: house owners of the producing and promoting ends had been made depending on a grid they didn’t management.

The mannequin rested on three assumptions: tariffs would mirror the price of provide, DisCos would gather what they billed, and fuel would attain the vegetation. None held for lengthy. Tariffs had been repeatedly held beneath value for political causes, with the federal government promising to cowl the hole. Those funds had been typically late or incomplete. In 2023, the Electricity Act changed the 2005 legislation and, importantly, allowed states to manage their very own electrical energy markets.

The current state of affairs

On paper, Nigeria has greater than 13, 000MW of put in capability. In follow, the grid usually carries between 3, 500MW and 5, 000MW, in opposition to peak demand estimated at over 20, 000MW. Thermal vegetation, which provide roughly 70 per cent of electrical energy, rely upon fuel, and fuel suppliers rely upon being paid.

The fragility of the community was on full show this 12 months. After a collapse on December 29, 2025, the grid failed once more on January 23, 2026, with technology falling from about 4,000MW to close zero. Within days it fell once more, to simply 39MW. Reports from the grid operator and TCN attributed instability to line tripping, generator disconnections, and decreased fuel provide.

The Federal Executive Council authorised a N4 trillion debt-reduction programme after a verification train. The turbines put the determine at about N6.5 trillion on the finish of 2025 and about N7.66 trillion by June 2026.

The distribution finish is not any more healthy. NERC reported that the DisCos’ combination technical, industrial and assortment losses reached 37.03 per cent in 2025, far above the 20.54 per cent their tariff framework permits. The federal authorities carried a tariff subsidy obligation of N1.93 trillion in 2025 as a result of regulated costs remained beneath the price of provide. Metering stood at 57.27 per cent in December 2025, which suggests hundreds of thousands of shoppers are nonetheless billed by estimate.

What should be

Privatisation was offered as a switch of possession when it wanted to be a switch of danger, on circumstances that had been met earlier than the keys modified palms.

First, the money chain ought to have been fastened. Investors who purchase a distribution enterprise want a tariff that covers prices, or a subsidy that’s budgeted and paid on schedule. Neither was assured.

Second, metering and loss discount ought to have been circumstances of the sale, not guarantees made afterwards.

Third, the community mustn’t have lagged the sale. A grid that can’t carry the ability it’s given makes technology capability tutorial.

Fourth, fuel provide and pricing for energy vegetation wanted to be settled prematurely, since an influence plant with out fuel is a stranded asset.

Finally, a very unbiased regulator, insulated from election-season strain, ought to have held the road on tariffs.

 The results of skipping these steps was a market that regarded non-public however behaved like a public utility: the entire accountability of the state, none of its steadiness sheet.

What govt is doing

Despite the state of affairs, the federal government continues to do its bid to revive hope to Nigerians.

The centre-piece is the Presidential Power Sector Debt Reduction Programme. The first bond, N501 billion, was totally subscribed and used to settle a part of what GenCos are owed.

A second collection of about N728.9 billion adopted in September 2026, made up of N402 billion in money bonds raised from capital-market buyers and N326.9 billion in non-cash bonds issued on to taking part GenCos.

Together, the 2 issuances quantity to roughly N1.23 trillion, and NBET says it has begun settling taking part GenCos and their fuel suppliers.

The most important structural shift could also be decentralisation. By July 2026, NERC’s chairman, Musiliu Oseni, confirmed that electrical energy market regulation had been transferred to 16 states, with Akwa Ibom’s order in August positioning it to change into the seventeenth. NERC retains authority over interstate operations and the nationwide grid.

The Ministry of Power will not be resting on its oars because it continues to search out new pathways that enhance the grim state of affairs.

On November 6, 2026, the minister blamed the drop in electrical energy provide on the graduation of deliberate upkeep at Egbin Power Station and constraints in fuel provide to some thermal energy stations, which had decreased the quantity of electrical energy obtainable on the nationwide grid.

This, he mentioned, had necessitated the grid operators implementing load shedding in some areas to handle the shortfall. He added that the sabotage of key transmission strains had additionally restricted the usage of different routes to produce some areas, particularly Lagos.

In one other assertion on November 7, 2026, he shared that 98 of over 300 containers carrying energy provide gear, which had been ‘stranded’ on the port for practically 20 years, had been authorised for launch.

He famous that as quickly because the ministry took supply of the gear, it could be examined and deployed to spice up electrical energy provide by increasing energy networks, relieving overloaded substations and bringing extra dependable electrical energy to Nigerians.

“The equipment, which includes high-capacity transformers, cables and switchgear, was procured to expand the transmission network and relieve overloaded substations. Its detention stalled projects, kept existing substations under heavy strain, exposed valuable assets to deterioration and accumulated charges on the cargoes,” Power minister Joseph Tegbe mentioned.

Tegbe added that “the cost is felt daily by businesses spending more on alternative power, families enduring interruptions and public institutions struggling to maintain essential services.”

He mentioned additional that the Ministry was additionally working with operators to enhance fuel provide and speed up repairs to the broken infrastructure.

What specialists say

The Association of Power Generation Companies (APGC) has rejected ideas that its members are inflating their claims.

“These are structural market realities, not arbitrary demands,” the affiliation mentioned.

The GenCos have additionally warned that sector debt might attain about N17.11 trillion by 2033 regardless of the bond programme, and argue the primary collection lined solely a small fraction of the legacy debt.

TransCorp chairman Tony Elumelu has warned that provide might collapse if the federal government fails to pay GenCos and speed up reforms. On devolution, Oseni described the transfers as ushering in “a new era of multi-level regulation,” whereas observers be aware that disputes between state and federal oversight are the following friction level.

“DisCos didn’t do their due diligence properly before taking up those assets. And industry experts have repeatedly said that they don’t have the deep pockets to address the challenges,” Igho Efih, an economist, instructed Blueprint.

The path to stability

Nigeria’s energy drawback is solvable, however not by treating every symptom individually. Five issues want to maneuver collectively.

First, settle a single, audited debt determine and publish it. Until the federal government, NBET and the GenCos agree on what’s owed, each fee will probably be disputed.

Second, finish the cycle of unfunded tariffs: both transfer in the direction of cost-reflective pricing with focused safety for the poorest, or fund the subsidy within the price range and pay it on time.

Third, put actual cash and, the place applicable, non-public participation into transmission, as a result of no quantity of technology helps if TCN can’t carry it.

Fourth, safe fuel provide and pricing for energy vegetation, in order that fee shortfalls cease shutting down technology.

Fifth, end the metering job and produce DisCo losses towards the degrees their very own tariffs assume.

Decentralisation provides a manner across the central bottleneck, however provided that state markets are higher regulated and higher financed than the system they’re changing. A badly run state utility remains to be a badly run utility.