Nigeria’s FEC Approves NIEP – National Electricity Policy to Overhaul Power Sector, Spur Investment

The Federal Government has approved the National Integrated Electricity Policy (NIEP), a radical framework presented as the most ambitious attempt to date to revise the chaotic and underperforming sector of Nigeria.

The policy was ratified at the meeting of the Federal Executive Council (FEC) held Monday and is designed to serve as a national roadmap which aligns with the new electricity law, 2023. The announcement was made in a press release published by Mr. Bolaji Tunji, special advisor on strategic communications and relations with the media with the Minister of Power, Mr. Adebayo Adelabu.

The NIEP replaces the national obsolete electricity policy of 2001, the federal government describing it as a plan to restructure the Nigerian electricity supply industry (NESI). The new policy aims to improve services, encourage investment, deepen regulatory reforms and accelerate the adoption of renewable energies and decentralized energy models.

Mr. Adelabu confirmed that the implementation of THE Politics have already to start. “This roadmap is a critical challenges in the Nigeria electricity sector thanks to a complete framework that provides clear directives for electricity production, sustainable transmission and distribution,” he said.

According to him, the NIEP is designed to solve long -standing structural problems in the sector and is aligned with the world’s best practices.

“This policy will guide stakeholders – federal governments and states, investors, developers and consumers – while we are sailing in this energy transition,” said Adelabu.

The policy also meets the mandate of article 3 (3) of the Electricity Act, 2023, which obliges the federal government, through the Power Ministry, to publish an integrated electrical policy and a strategic implementation plan in the year following the adoption of the law.

Political characteristics: daring but familiar

Among the notable characteristics of NIEP, it is placed on the encouragement of decentralized planning and states of autonomy to develop and regulate their own electricity markets – the posts already conferred by the electricity law, 2023. These provisions have opened the door declares to write their own electricity laws and explore independent generation and distribution plans.

But beyond the decentralized structure, the NIEP adds other ambitious reforms aimed at approaching directly The deep causes of the dysfunction of the Nigeria power sector. These include:

• Break the monopoly structures of electricity production and distribution to promote competition.
• Stimulation of capital investments, in particular in electrical infrastructure and local manufacturing.
• Expand renewable energy options to reduce over-dependence on gas food production.
• Improvement in energy efficiency, in order to reduce system losses and reduce costs for consumers.
• Resilience and climate sustainability, aligning the growth of Nigeria power with global climatic objectives.

The government say it expects politics to attract private capital, strengthens reliability and restores investor confidence in a sector that has not met expectations despite years of reform.

Another policy. The same problems?

However, not everyone is convinced that the new policy will provide significant results. Nigeria has revised its electricity laws and structures several times in the pastWith little to show for that.

The most important overhaul began under President Olusegun Obasanjo in the early 2000s when the government was unbundled the National Electric Power Authority (NEPA) and launched the Privacy of the sector. This led to the creation of successive companies under the Power Portfolio Company of Nigeria (PHCN) and possibly the transfer of distribution and generation assets to private operators in 2013.

However, the privatization reader was not translated as a better power supply. Nigerians continue to undergo frequent breakdowns, while the national grid collapses several times a year. Access to electricity remains less than 60% at the national level and companies spend billions of nairas each year for diesel generators to compensate for unreliable power.

While many stakeholders have expressed the optimism that the NIEP could finally direct the sector in a better direction, some wondered if the political will and the institutional capacity required for execution really exist.

Observers point out that decentralization alone will not fix the sector if underlying problems – such as low regulations, insufficient transmission capacity, lack of measurement, pricing deficits and corrupt purchasing practices – are not simultaneous.

For example, the Nigeria Transmission Company (TCN), which remains under the control of the government, continues to be a weak link in the power chain, failing to evacuate the generated power due to the elderly infrastructure and poor coordination. Meanwhile, regulatory organizations such as the Nigerian Commission for Electricity Regulations (NERC) have often had trouble applying compliance or penalizing failing.

The government say it Understands these concerns and insists that the NIEP was developed by thinking of this story. Adelabu explained that the policy was formulated thanks to an in -depth commitment from stakeholders who included actors in the public and private sector, civil society organizations, governments of states, universities and donor agencies.

“It is not only another policy. It is a practical and inclusive document based on a large consensus,” he said.

NIEP also incorporates coordination mechanisms between federal and state actors and introduces reforms aimed at ensuring Considerable costs by protecting vulnerable consumers.