Power Supply: FG to Punish Underperforming DisCos, GenCos, Unveils New Performance Rules
- The Federal Ministry of Power plans to sanction underperforming DisCos and GenCos while rewarding companies that meet performance targets
- The government also plans to reform electricity tariffs, strengthen transmission corridors, reduce power losses and expand metering to improve the sector
- Nigeria has 13,625MW of installed capacity but averages only 4,854MW in supply, forcing Nigerians to spend an estimated N16.5 trillion on self-generated electricity in 2023
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Legit.ng journalist Victor Enengedi has over a decade's experience covering energy, MSMEs, technology, banking and the economy.
The Federal Ministry of Power has announced plans to sanction underperforming electricity distribution and generation companies (DisCos and GenCos) as part of efforts to improve power supply and support Nigeria’s industrial growth.
The Minister of Power, Joseph Olasunkanmi Tegbe, disclosed this in a policy brief presented by his Special Adviser, Martins Olajide, at the NESG Industrialisation and Competitiveness Forum on Wednesday, August 19, 2026.
Source: UGC
Power Operators Face New Performance Standards
Tegbe said the ministry would introduce performance scorecards covering power sector personnel, DisCos and GenCos, with operators that meet targets rewarded while those that fall short face penalties.
According to him, the system is designed to improve accountability across the electricity value chain and ensure that companies operate according to clearly defined performance standards.
The minister said improving the performance of electricity operators and restructuring tariffs are critical to building a dependable power market capable of driving industrial productivity.
He added that the proposed tariff reforms would seek to protect vulnerable electricity consumers while ensuring that operators across the value chain fulfil their supply obligations.
The initiatives are part of the ministry’s eight-point agenda aimed at stabilising the power sector, restoring market discipline and strengthening governance.
Government Targets Transmission, Metering and Power Losses
Tegbe said the government would also focus on maximising existing electricity infrastructure and strengthening key transmission corridors.
The Lagos, Enugu-Port Harcourt and Abuja-Kaduna-Kano transmission corridors are expected to receive attention, with the Lagos corridor serving as a demonstration project for the broader grid stabilisation programme.
The ministry also plans to reduce technical and commercial losses while expanding electricity metering programmes to improve revenue collection and strengthen the efficiency of the power market.
Nigeria currently has 13,625 megawatts (MW) of installed grid generation capacity, but only about 4,854MW is available on an average daily basis.
Tegbe noted that this means roughly 62 percent of installed capacity remains idle, even though the country’s realistic peak electricity demand is estimated at about 20,000MW.
Nigeria Spends Trillions on Self-Generation
The minister said the persistent gap between available electricity and demand has forced households and businesses to increasingly depend on alternative sources of power.
He disclosed that Nigerians spent an estimated N16.5 trillion on self-generated electricity in 2023, compared with roughly N1 trillion generated as revenue by the national grid.
Source: UGC
Tegbe, citing World Bank estimates, added that inadequate electricity supply costs Nigeria approximately $25 billion every year, representing between 5 percent and 7 percent of the country’s gross domestic product (GDP).
He said closing the power supply gap remains essential to reducing the burden of self-generation and creating a more competitive environment for businesses and industries.
Source: Legit.ng
