Tinubu approves Electricity Act 2023 which allows state and private companies to generate power

President Bola Ahmed Tinubu has given his approval to the Electricity Act 2023, which was initially passed by lawmakers in July 2022.

The new Electricity Act serves as a replacement for the Electric Power Sector Reform Act (EPSRA) of 2005.

By enacting the new Electricity Act, Nigeria aims to promote the de-monopolization of its electricity sector at the national level. This allows states, companies, and individuals to participate in electricity generation, transmission, and distribution. Under the act, individuals or entities can construct, own, or operate electricity generation facilities of up to one megawatt in total capacity at a specific location. Similarly, they can undertake electricity distribution with a capacity of up to 100 kilowatts in total at a specific site, or as determined by the Commission from time to time, without requiring a license.

The act also grants states the authority to regulate their electricity markets by issuing licenses to private investors interested in operating mini-grids and power plants within their respective states.

Only three states—Lagos, Edo, and Kaduna—have established electricity market laws and can independently regulate their electricity markets. However, for states without such laws, the Nigerian Electricity Regulatory Commission (NERC) will oversee the regulation of their electricity generation and transmission.