FG to Launch Rival Power Companies to Challenge Discos in Next 15 Years
The Federal Government is preparing to shake up Nigeria’s electricity sector by creating new power companies that will compete directly with the existing distribution companies, or Discos.
Speaking at the Oriental News 2026 Conference in Lagos on Thursday, the Managing Director of the Rural Electrification Agency, Abba Aliyu, said the agency plans to support the development of Renewable Energy Service Companies, called RESCOs, over the next 10 to 15 years. He was represented by the Executive Director, Corporate Services, Gboyega Ayoade.
According to Aliyu, the government is moving away from small, isolated mini-grids. Instead, it wants developers to build large, interconnected networks of mini-grids that can power entire communities without relying on the national grid. These RESCOs will use solar energy and battery storage to provide 24-hour clean electricity as an alternative to Discos.
“Instead of one developer building one mini-grid in a community, we are now encouraging them to build 20 to 50 interconnected mini-grids to cover a whole area,” he explained. “So in future, you can choose to get all your power from AYZ Renewable Energy Service Company and get clean power all day.”
Aliyu said the move became necessary because many communities still do not get power from Discos, mainly because it is not profitable for them or because the infrastructure is poor. He added that some Discos already have agreements with mini-grid developers to hand over areas they do not serve.
In places where Discos have no presence at all, RESCOs will be allowed to build their own transmission lines, but only with approval and exclusive rights from the Nigerian Electricity Regulatory Commission, NERC.
On pricing, the REA boss said Nigeria must start treating electricity as a commercial product, not a government handout. He argued that subsidies are no longer sustainable and that cost-reflective tariffs are the only way to achieve stable power. He pointed to Band A customers who now pay more but receive 18 to 24 hours of electricity daily as proof.
“We can extend that to Band B and Band C gradually. But people must pay the real cost of generating power. The government is broke and cannot keep subsidizing power,” he said.
Aliyu also raised concerns about the quality of solar panels and lithium batteries being imported. He said the REA tests all equipment used in its projects and is working with the Standards Organisation of Nigeria to screen imports. The agency is also putting plans in place for safe recycling and disposal of used batteries.
The conference host, Publisher of Oriental News Nigeria, Mrs. Yemisi Izuora, noted that while extractive industries drive the economy, protecting the environment is also key to health and future opportunities.
The government’s plan under the Distributed Access for Renewable Energy Scale-Up program involves rolling out many mini-grids across the country, with developers already negotiating directly with Discos to take over unserved areas.
If successful, the RESCO model could give Nigerians a real choice in electricity providers and help close the power gap in communities left behind by the current system.
