… liquidity constraints, legacy debt, metering gaps, ageing infrastructure continue to influence decentralised market outcomes
Oredola Adeola
PricewaterhouseCoopers has stated that Nigeria’s decentralised electricity market, under the operational framework of the Electricity Act 2023, requires stronger alignment and credibility among federal and state actors, regulators, and private investors, stressing that the sector’s next phase of growth will hinge more on disciplined execution than on policy ambition.
It further noted that credibility in a decentralised electricity market is built through aligned and consistent action among stakeholders, adding that the extent to which such alignment is achieved will ultimately determine whether the reform delivers improved power supply reliability, attracts sustained private investment, and drives long-term economic growth.
These positions were contained in PwC’s report on the outcomes of its 2025 Annual Power & Utilities Roundtable, held on 27 November 2025 under the theme “Nigeria’s Multi-Tier Electricity Market: Imperatives for Successful Evolution,” that featured former Minister of Power, Chief Adebayo Adelabu, regulators, Lagos State Commissioners of Energy, MDs of utilities companies, and industry financiers.
Pedro Omontuemhen, Partner and West Market Area Leader for Energy, Utilities & Resources at PwC, in a document released and obtained by Advisors Reports, said stakeholder discussions reflected a sector increasingly adjusting to decentralisation, commercialisation, and the pursuit of financial sustainability.
He noted that despite the emergence of new licensing, financing, and operating models as states assume greater regulatory authority, long-standing structural constraints continue to shape reform outcomes.
According to him, liquidity pressures within the distribution segment persist, while subsidy structures remain in transition. He added that metering gaps and ageing infrastructure continue to weigh on service delivery and revenue assurance across the value chain.
Omontuemhen further observed that the main constraint to scaling renewable energy deployment is not resource availability, but rather limited access to early-stage project development finance and the absence of sufficiently bankable investment structures.
He therefore echoed the position of stakeholders, stressing the need for clearer federal and state regulatory alignment, stronger cooperation between regulators and utilities, accelerated metering and network rehabilitation, credible tariff frameworks, and more effective mechanisms to mobilise private capital across distribution, transmission, and renewable energy segments.
PwC further summarised stakeholder positions, noting that the early phase of implementing Nigeria’s multi-tier electricity framework highlights a central challenge for the next stage of reform.
The report stated that changes in how states initiate projects, how federal institutions stabilise the system, and how investors assess risk must now be properly aligned across the market.
According to PwC, how federal and state institutions respond to these early signals will determine whether Nigeria’s multi-tier electricity market moves from transition to consolidation.
It observed that states with clearer data on demand patterns, network conditions, and customer profiles are better positioned to design tariffs, monitor performance, and attract investment. However, where data gaps persist, regulatory decisions become more difficult to justify and enforce.
The firm noted that while decentralisation is reshaping regulatory relationships, it does not in itself resolve longstanding distribution sector challenges.
It added that liquidity constraints, legacy debt, metering gaps, and ageing infrastructure continue to influence outcomes, requiring coordinated action on tariffs, metering, infrastructure financing, and regulatory alignment across federal and state levels.
PwC explained that federal institutions are currently focusing on grid stability, fiscal exposure, and national coordination, while states are beginning to exercise regulatory and planning authority within their jurisdictions.
It further stated that distribution companies are operating under evolving oversight amid persistent financial constraints, while off-grid providers are expanding access initiatives and financiers are increasingly evaluating opportunities within smaller, clearly defined market segments.
According to the report, these developments point to a shared execution challenge, with reform progress depending on whether actions by federal institutions, states, utilities, and financiers are mutually reinforcing.
It added that where regulatory clarity, reliable data, reduced distribution risks, and defined revenue pathways exist, reform momentum strengthens. Conversely, weak alignment increases uncertainty.
PwC emphasised that a multi-tier electricity market does not automatically guarantee improved performance, but instead raises the demand for coordination, discipline, and accountability across all levels of the sector.
