FG Proposes 24-Hour Power Zones To Strengthen Nigeria’s Electricity Distribution

By Olumide Johnson

The federal government has begun discussions with electricity distribution companies (DisCos) on creating designated energy zones capable of providing 24-hour electricity to homes, businesses and industries in major demand centres.

The proposed zones cover the Lagos axis, Abuja-Kaduna-Kano corridor, and Enugu-Port Harcourt corridor. The initiative is centred on strengthening the distribution end of the electricity value chain rather than treating generation and transmission alone as the supply constraint.

DECISION HIGHLIGHT

The policy shifts attention towards the ability of DisCos to absorb available electricity, deliver it reliably and collect revenue from customers. Its commercial logic is to concentrate infrastructure and supply reliability where electricity demand is highest and economically most productive.

DECISION MEMO

The federal government’s engagement with DisCos indicates an attempt to move Nigeria’s electricity challenge from a broad supply problem towards a more geographically targeted delivery model.

Minister of Power, Joseph Tegbe, identified distribution capacity as a critical constraint, arguing that electricity availability is meaningful only when power can be taken up and delivered to consumers.

“The constraint on the sector is not limited to generation and transmission but includes how much power is taken up and delivered at the distribution end,” Tegbe said.

That distinction has important commercial implications. A zone receiving dependable power could create a stronger operating environment for manufacturers and businesses while giving DisCos a more concentrated customer base from which to improve collection performance.

Tegbe said that the zones would help close the distribution gap, unlock commercial and industrial demand, and improve the revenue and collection performance of DisCos. He also said electricity infrastructure would continue to be expanded in high-demand areas, with supply capacity expected to grow alongside economic needs.

The unresolved issue is execution. No implementation timeline, supply capacity or detailed infrastructure requirement has yet been disclosed. The proposal therefore represents a framework for restructuring electricity delivery, rather than evidence that 24-hour supply has already been secured.

DATA BOX

• Proposed coverage: Lagos axis; Abuja-Kaduna-Kano corridor; Enugu-Port Harcourt corridor.
• Intended beneficiaries: households, businesses and industries.
• Participating DisCos reported: Abuja Electricity Distribution Company, Ikeja Electric, Eko Power, Ibadan Electricity Distribution Company.
• Other participant: Sahara Energy Group.
• Core intervention: distribution-focused energy zones.
• Undisclosed variables: implementation timeline, supply capacity and required infrastructure investment.

WHO WINS / WHO LOSES

Potential beneficiaries include manufacturers, commercial users and businesses requiring dependable electricity, while DisCos could gain from stronger demand concentration and improved collections.

The model could also expose poorly performing distribution networks to greater scrutiny if designated zones fail to deliver the reliability expected of them.

POLICY SIGNALS

Federal electricity policy is increasingly recognising that additional generation does not automatically translate into reliable consumer supply. Geographic concentration of infrastructure and demand could become a mechanism for improving the efficiency of the distribution segment.

INVESTOR SIGNAL

The proposed zones could create clearer investment opportunities in distribution infrastructure, embedded generation, metering, network reinforcement and industrial power solutions, particularly where dependable demand already exists.

RISK RADAR

The principal risks are inadequate generation allocated to the zones, weak distribution infrastructure, financing gaps and poor implementation coordination. Without measurable service standards, investment commitments and accountability mechanisms, the zones could become designated areas without delivering genuine 24-hour electricity.

Olumide Johnson is a journalist, reporting on energy, maritime, business, and developments shaping Nigeria’s economy.