President Bola Tinubu, on Friday, has officially signed the 2023 Electricity Act, effectively replacing the long-standing Electricity and Power Sector Reform Act of 2005. This landmark legislation marks a major shift in the Nigerian electricity industry.
The newly enacted law aims to break the monopoly in electricity generation, transmission, and distribution at the national level. With this reform, states, companies, and individuals will now have the authority to generate, transmit, and distribute electricity within the country.
The passage of the Electricity Act 2023, initially approved by lawmakers in July 2022, allows states to issue licenses to private investors for the operation of mini-grids and power plants within their respective territories. This move is expected to foster greater competition and innovation in the sector.
However, it is important to note that the Act restricts interstate and transnational electricity distribution, focusing primarily on empowering local entities and decentralizing the power sector.
This significant step toward liberalizing the electricity industry is expected to bring about positive changes, encouraging private investment and driving progress in Nigeria’s power infrastructure.