Tinubu plans new company to fix Nigeria’s electricity grid problem

Nigeria’s government is moving to create a new state-owned company aimed at fixing one of the most persistent problems in the country’s electricity sector: power that is generated but cannot reach consumers.

President Bola Ahmed Tinubu on Friday inaugurated a committee to establish the Grid Asset Management Company (GAMCO), a proposed entity designed to manage key transmission infrastructure and unlock stranded generation capacity.

The committee, chaired by presidential chief of staff Femi Gbajabiamila, will design the legal and financial framework for the new company after receiving approval from the Federal Executive Council earlier this week.

The initiative targets a structural weakness that has plagued Nigeria’s electricity market for decades: power plants can produce more electricity than the national grid can transmit.

Fixing Nigeria’s “stranded power”

Nigeria has an installed generation capacity of more than 13,000 megawatts but typically delivers only about 4,000–5,000 megawatts to the grid.

A key reason is inadequate transmission infrastructure, which leaves several government-backed power plants underutilised.

The new company is expected to focus first on three plants built under the National Integrated Power Project: Omotosho, Olorunsogo and Ihovbor.

Together they have a combined installed capacity of about 1,775 megawatts, but much of that output cannot be fully evacuated because of grid constraints.

According to the presidency, GAMCO aims to recover at least 1,600 megawatts of stranded capacity within 18–24 months.

A new transmission model

The company would operate as a government-owned commercial entity, with shares held by the Ministry of Finance Incorporated.

Its pilot project will focus on the Benin–Lagos transmission corridor, one of the most critical electricity routes in the country because it supplies power to Nigeria’s largest industrial centres.

Under the plan, the Niger Delta Power Holding Company will lease the power plants to GAMCO and the Transmission Company of Nigeria will allow the firm to develop and operate a new 330-kilovolt transmission line along the corridor.

The idea is to create a dedicated infrastructure vehicle that can attract private capital to upgrade grid capacity more quickly than traditional government projects.

The proposal comes amid longstanding criticism of Nigeria’s fragmented electricity sector, which already involves multiple agencies including the Transmission Company of Nigeria, the Nigerian Electricity Regulatory Commission and the Niger Delta Power Holding Company.

Analysts say the effectiveness of GAMCO will depend on whether it genuinely accelerates infrastructure investment or simply adds another layer to an already complex institutional structure.

The committee inaugurated Friday will review existing electricity laws and regulations to determine how the new company would fit into the sector’s framework.

Nigeria’s broader power crisis

Nigeria’s electricity shortages remain one of the country’s biggest economic constraints.

Businesses and households rely heavily on diesel generators due to unreliable grid supply, raising production costs and limiting industrial growth.

Successive administrations have attempted to reform the sector since the privatisation of power generation and distribution companies in 2013, but transmission bottlenecks and weak market finances continue to undermine progress.

The government says the GAMCO initiative is intended to convert underperforming public assets into reliably delivered electricity, improve grid stability and support economic competitiveness.

If the pilot project succeeds, officials say the model could be extended to other transmission corridors across the country.