Authorities in Nigeria are considering the creation of a new state-backed company to manage and modernise the country’s electricity transmission infrastructure, as the government seeks to tackle long-standing bottlenecks in the national power system.
President Bola Tinubu has proposed establishing a Grid Asset Management Company (GAMCO) that would oversee key elements of the country’s transmission network, according to government officials and local media reports.
The proposed entity would be responsible for managing critical transmission infrastructure including high-voltage transmission lines, substations and transformers that carry electricity from generation plants to distribution companies across the country.
Officials say weaknesses in the transmission system remain one of the biggest obstacles to improving electricity supply in Africa’s most populous nation.
Information Minister Mohammed Idris said the president has identified transmission as a central challenge in resolving the country’s long-running power shortages.
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Nigeria has struggled for decades with unreliable electricity despite having significant installed generation capacity. Analysts say power generation often exceeds what the national grid can transmit, meaning electricity cannot always be delivered to homes and businesses.
“Transmission remains a major constraint in the electricity value chain,” Idris said, adding that addressing the issue is essential for improving overall power sector performance.
Under the proposal, GAMCO would take responsibility for managing and upgrading the grid’s core physical assets. Supporters of the initiative say this could help improve maintenance, attract investment and speed up modernisation of the transmission network.
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The move forms part of broader reforms being pursued by the administration of President Tinubu to stabilise Nigeria’s energy sector and address structural problems that have undermined electricity supply for years.
According to reports by Nigerian newspaper The Punch, the establishment of the new company could require legislation from the country’s parliament. A government committee is currently examining the proposal’s legal, regulatory and financial implications before any final decision is taken.
Nigeria’s power sector operates through a multi-tier structure involving generation companies, the state-owned transmission network and private electricity distribution firms.
While power generation and distribution were largely privatised more than a decade ago, transmission infrastructure remains under government control through the Transmission Company of Nigeria.
Industry experts say underinvestment and ageing infrastructure have left the transmission grid unable to efficiently move electricity across the country.
Even when power plants are able to generate electricity, transmission constraints often prevent that power from reaching distribution companies and end users.
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This imbalance has contributed to frequent grid collapses and persistent power outages that continue to affect households and businesses across the country.
The proposed GAMCO initiative comes as the Nigerian government pursues wider reforms aimed at stabilising the electricity sector’s finances.
In January, authorities announced they had raised 501 billion naira (about $360 million) through a bond issuance to help settle part of the sector’s accumulated debts.
The funds are intended to clear arrears owed to electricity generation companies and other participants in the power value chain, which have long complained about delayed payments and financial losses.
Nigeria’s electricity market has been weighed down by mounting debts linked to tariff shortfalls, government subsidies and payment collection challenges.
At the same time, the federal government has begun reforming how electricity subsidies are funded.
Officials in Abuja have indicated that the federal government will no longer shoulder the full cost of electricity subsidies, calling instead on state governments to share the financial burden.
The policy shift is part of broader efforts to ease fiscal pressure on the federal budget while gradually moving toward a more sustainable electricity pricing system.
Analysts say strengthening the transmission network will be critical if Nigeria is to fully benefit from investments in generation and distribution.
Without sufficient grid capacity, additional electricity produced by power plants cannot be effectively transmitted to consumers.
If approved, the creation of GAMCO could mark another step in Nigeria’s attempts to overhaul its struggling power sector and improve electricity reliability for millions of citizens and businesses.
