The bill aims to overhaul the 2023 Electricity Act by addressing regulatory gaps and warning that investors risk losing their stakes through share dilution, receivership, or outright re-privatisation if fresh capital is not injected into the sector within 12 months. If passed into law, it will empower the Nigerian Electricity Regulatory Commission to compel core investors in the 11 successor Discos to inject fresh capital or face stiff regulatory action, including share dilution, receivership, or outright re-privatisation.

The proposed bill has attracted condemnation from the Forum of Commissioners of Power and Energy, warning that it poses a serious threat to the country’s newly decentralized electricity market and could reverse key reforms achieved under the landmark Electricity Act of 2023. The bill also gives the commission powers to impose sanctions, including dilution of shares or re-privatisation, on defaulting Discos, particularly those under receivership or financial distress.

The amended Act stipulates that a comprehensive framework must be developed within 12 months to overhaul the financial structure of the Nigerian Electricity Supply Industry, with a strong focus on attracting long-term local currency investments and phasing out “unstructured and regressive subsidies.” However, power sector experts and consumer advocacy groups argue that the proposed law can only be effectively implemented if the long-standing subsidy debts crippling the sector are first cleared. They recommend extending the recapitalisation deadline to 24 months for a more realistic and structured transition.