FG Mulls Recapitalization of Discos for Power Sector Growth

The Federal Government of Nigeria is contemplating imposing minimum capital adequacy requirements on electricity distribution companies (Discos) whose licenses are set to expire in 2028. This move aims to enhance the financial health and liquidity of Discos to encourage more investments in the sector.

Adebayo Adelabu, speaking at an energy conference in Lagos, highlighted the challenges faced by the power sector, including capitalization issues and debt burdens. The government intends to ensure that poorly performing Discos meet expectations before renewing their licenses, emphasizing the need for improved service delivery and financial stability.