Nigeria Plans Grid Asset Management Company to Fix Power Grid

By Ayo Susan

President Bola Ahmed Tinubu has initiated a proposal for the creation of a Grid Asset Management Company as part of efforts to resolve structural weaknesses in Nigeria’s electricity transmission system.

Mr. Mohammed Idris, Minister of Information and National Orientation, disclosed the development while briefing State House correspondents after the recent Federal Executive Council (FEC) meeting presided over by the President.

According to Idris, the proposal was presented to the Federal Executive Council by President Tinubu through a formal memorandum seeking deliberation on the creation of the Grid Asset Management Company, designed to manage and strengthen Nigeria’s national electricity grid.

The minister explained that the initiative is aimed at addressing the persistent transmission bottlenecks that continue to undermine power supply despite earlier reforms that unbundled the electricity industry into generation, transmission and distribution segments.

“You recall that since the deregulation of the power sector, the sector is divided into three categories: generation, transmission and distribution. The President has seen that where the problem is mainly in our quest to solve the power problem is largely in the transmission section,” Mohammed Idris said.

The FEC consequently approved the formation of an inter-ministerial committee to design the regulatory, operational and investment framework for the proposed company.

Mr. Idris added that the committee will examine the legal architecture, regulatory environment and investor interests connected to the establishment of the Grid Asset Management Company.

“All the enabling parameters will be looked at, the laws will be examined, and those who are practising in that sector and those who have invested in that sector will also have their level of investment considered,” Idris said.

He also noted that the proposal will eventually be transmitted to the National Assembly if legislative backing becomes necessary.

“The President feels that for us to actually industrialise, the power sector must be fixed, and that is why he has taken this initiative of looking at how this Grid Asset Management Company will be set up to help solve the problem of power in this country,” Idris stated.

In a separate decision, the FEC also approved an additional exit benefit scheme for retiring civil servants working in treasury-funded ministries, departments and agencies under the contributory pension scheme.

DECISION HIGHLIGHT

FEC approves framework design for Grid Asset Management Company to overhaul Nigeria’s electricity transmission system.

DECISION MEMO

The proposed Grid Asset Management Company signals a recognition by the Federal Government that Nigeria’s electricity crisis is no longer primarily a generation problem but a transmission capacity failure.

Over the past decade, Nigeria’s power sector reforms have largely focused on privatising generation and distribution assets. Yet the national transmission grid has remained largely state controlled and structurally underinvested.

This imbalance has created a systemic bottleneck. Power plants often generate electricity that cannot be fully transmitted across the grid, while distribution companies face constraints delivering available electricity to end users.

The proposal to create a Grid Asset Management Company therefore represents an attempt to restructure the governance and financing model of the transmission network.

From a policy design standpoint, the initiative reflects an emerging consensus within government that transmission infrastructure requires specialised asset management, investment mobilisation and technical oversight separate from conventional public sector bureaucracy.

The inter-ministerial committee established by the FEC will examine regulatory structures, investment models and legal implications surrounding the proposed entity. The composition of the committee, which includes ministries responsible for power, finance, gas, science and technology, works, and justice, indicates that the proposal intersects infrastructure policy, fiscal strategy and industrial development.

The reform also implicitly acknowledges the limits of Nigeria’s previous electricity deregulation model.

While the generation and distribution segments were liberalised, the transmission network has struggled with capacity constraints, grid collapses and weak infrastructure upgrades. As a result, improvements in electricity generation have not consistently translated into stable nationwide supply.

Mr. Idris framed the initiative within Nigeria’s broader industrialisation ambitions.

“The President feels that for us to actually industrialise, the power sector must be fixed,” Idris said.

If implemented effectively, a Grid Asset Management Company could introduce a new financing and operational architecture for grid infrastructure, potentially attracting long-term capital into transmission upgrades.

However, the proposal remains at the conceptual stage pending the committee’s recommendations and potential legislative action.

The simultaneous approval of additional retirement benefits for civil servants also signals an administrative reform dimension within the Federal Executive Council’s decisions, reflecting attempts to strengthen morale and efficiency within the public service.

DATA BOX

Structure of Nigeria electricity market after deregulation
Generation
Transmission
Distribution

Policy action approved by FEC
Establishment of inter-ministerial committee to design Grid Asset Management Company framework

Committee membership includes
Minister of Power
Minister of State for Gas
Minister of Works
Minister of Finance
Chairman of Nigerian Revenue Service
Minister of Science and Technology
Attorney-General of the Federation

Civil service reform decision
Exit benefit scheme for retiring civil servants in treasury-funded ministries, departments and agencies

Retirement benefit level approved
Up to 100 percent of total emoluments under contributory pension scheme

WHO WINS / WHO LOSES

Winners
Electricity generation companies that frequently face evacuation constraints may benefit from improved transmission capacity.
Industrial and manufacturing sectors that depend on reliable electricity could gain from a more stable grid.
Infrastructure investors may find new entry opportunities if the transmission system becomes investment driven.

Losers
Existing inefficiencies within the current transmission governance structure could face institutional restructuring.
Distribution companies may face stricter accountability if grid reliability improves but distribution losses persist.

POLICY SIGNALS

The proposal signals a shift from incremental electricity sector reform toward structural redesign of the transmission system.

It suggests that the federal government now views transmission infrastructure as the central constraint to power sector performance rather than generation capacity.

The move also reflects an emerging infrastructure policy orientation in which specialised asset management entities are deployed to improve the efficiency of strategic national infrastructure.

INVESTOR SIGNAL

For investors, the proposal indicates a potential opening of Nigeria’s transmission infrastructure to new financing structures.

If the Grid Asset Management Company adopts commercially viable governance and regulatory frameworks, it could attract institutional capital into grid modernisation projects.

Reliable electricity transmission would also improve the operating environment for manufacturing, technology and industrial investments.

RISK RADAR

Institutional design risk remains significant.

Without clear governance structures and regulatory independence, the proposed entity could replicate the bureaucratic inefficiencies that have historically constrained the transmission network.

Another risk lies in regulatory overlap between existing electricity institutions and the proposed company. If responsibilities are not clearly defined, operational conflicts could emerge within the power sector architecture.

Financing risks also remain. Transmission infrastructure requires long-term capital investments, and attracting private sector participation will depend heavily on credible regulatory frameworks and predictable tariff structures.