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NISO cuts transmission losses to 7% from 10% in one year

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The Managing Director/Chief Executive Officer of the Nigerian Independent System Operator, Abdu Bello, has disclosed that Nigeria’s power sector was losing between N5bn and N8bn monthly to transmission inefficiencies, even as he revealed that targeted interventions by the operator have begun to cut losses and improve grid stability.

Bello made this known on Wednesday during the organisation’s first anniversary celebration held at its headquarters in Utako, Abuja, where he presented a detailed scorecard of reforms and operational milestones recorded since its establishment.

Recall that NISO was officially created on April 30, 2024, by the Nigerian Electricity Regulatory Commission following the unbundling of the Transmission Company of Nigeria under the Electricity Act, 2023.

Speaking on one of the most pressing challenges inherited by the operator, Bello said the transmission loss factor at inception was alarmingly high, with severe financial implications for the power sector.

“One of the greatest problems we encountered at the inception of NISO was that we recorded a very high transmission loss factor. At some point, it was close to 10 per cent, costing about N5bn to N8bn monthly,” he said.

He, however, noted that deliberate operational measures have started yielding results.

“We are working on it, and we have reduced it to about 7.05 per cent at the moment. We are also working to reduce it further to about five or six per cent so that we will meet the target of the regulators,” Bello added.

Adopting a broader tone, the NISO boss said the past year had been defined by institution-building, system stabilisation, and market reforms aimed at repositioning Nigeria’s electricity sector.

“Today, we are not just celebrating one year of existence; we are reflecting on one year of deliberate effort, institutional progress, and measurable impact,” he said.

He explained that NISO was established to function as an independent system operator with responsibility for system operations, market administration, planning, and enforcement of grid codes and market rules.

“This mandate is central to Nigeria’s power sector reform. It is about ensuring that our grid is stable, our market is credible, and our planning is coordinated so that electricity can effectively support economic growth,” Bello stated.

On institutional development, he said the organisation had prioritised governance and coordination across the electricity value chain.

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“We have established governance and management structures at both board and executive levels, and strengthened coordination from generation through transmission to distribution and eligible customers,” he said.

A major highlight of the address was NISO’s push to digitise grid operations through advanced monitoring systems.

Bello disclosed that the operator is accelerating the deployment of Supervisory Control and Data Acquisition/Energy Management Systems to enable real-time grid visibility.

“On grid visibility, monitoring, and control, a key priority has been improving our ability to see, understand, and manage the national grid in real time. In this regard, we have accelerated the implementation of the SCADA EMS project, working very closely with the Nigerian Electricity Regulatory Commission, NERC, to ensure that the grid monitoring infrastructure SCADA EMS tool, which is a veritable tool for the system operations, is completed and operational.

“It’s a work in progress and we are seeing progress on this. We have also reached advanced stages in the deployment of the telemetry system across the grid at the electricity trading points,” he said.

He added that the organisation was also deploying telemetry systems and Internet-of-Things-based metering infrastructure across generation units, transmission lines, and substations.

“By the time we complete this project, hopefully before the end of the year, we shall have full visibility of the national grid from generation through transmission, substations, and distribution,” he stated.

According to him, the initiative would enable near-real-time electricity market settlements and significantly improve operational efficiency.

“Currently, we operate largely manually, but with telemetry, we can achieve hourly settlements or even real-time market operations,” he added.

Bello also revealed that NISO has intensified efforts to tackle grid instability and recurring system collapses through technical reforms and stricter compliance enforcement.

“Thank God, the regulators, NERC, have already ordered the distribution companies to install IoT meters on their 33 kV and 11 kV feeders, which is an ongoing project. So at the end of this project, we shall have end-to-end visibility of the system from generation through transmission, distribution, and eligible customers.

“Thereby, enabling our system operators and market operators to have visibility on a real-time basis and enhancing effective management of the grid. With that, our efficiency and effectiveness in managing the grid will be tremendously enhanced. These efforts are laying the foundation for full visibility and a data-driven grid and market operations environment.

“At the core of our mandate is ensuring a stable and resilient grid. We are working closely with generation companies and other stakeholders to implement the free-governor mode of operation of generating units to improve frequency response,” he said.

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He noted that compliance with this directive has already improved grid frequency stability.

“Substantially, a number of generating units have complied, and we have seen improvements in system frequency and overall grid reliability,” he said, while noting that enforcement actions were ongoing against defaulters.

He further disclosed plans to introduce grid “islanding”, a strategy that segments the national grid to prevent widespread outages.

“We are developing grid islanding to enhance resilience. Disturbances in one segment will not cascade across the entire grid. This will significantly reduce the risk of total system collapse,” he explained.

On market operations, Bello said NISO has taken steps to improve transparency, enforce compliance with market rules, and strengthen coordination among industry players.

“We have enhanced monitoring and enforced compliance with the grid code, market rules, and metering standards. We are also upgrading market systems to enable real-time operations and improved analytics,” he said.

He added that NISO is playing a central role in coordinating emerging state electricity markets following recent sector reforms.

“With states now able to establish their own electricity markets, there must be coordination between state systems and the national wholesale market. That interface is being managed by NISO,” he said.

The NISO boss also linked recent fluctuations in power generation to gas supply challenges, stressing the need for stronger coordination between the power and gas sectors.

“You will have noticed a slight drop in generation capability recently due to gas supply constraints. This coordination between the power sector and gas suppliers is very critical,” he said.

He assured that regulators and stakeholders are working to address the issue and prevent future disruptions.

In a significant development, Bello disclosed that Nigeria has achieved trial synchronisation of its national grid with the West African power system, opening new opportunities for cross-border electricity trade.

“On November 8, 2025, we successfully synchronised the Nigerian grid with the West African power pool, positioning Nigeria for enhanced regional power trade,” he said.

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He explained that the integration would allow Nigeria to export excess power and earn foreign exchange.

“This gives us a bidirectional opportunity to either supply power to the region or import when necessary. It also creates the potential to earn hard currency, which can be reinvested to improve domestic capacity. By

These interventions are contributing to improving system discipline and reliability together. On electricity market development and strengthening, we have made deliberate efforts to strengthen market credibility and transparency.

“Over the past year, we have enhanced monitoring and enforced compliance with the market rules, grid code, and metering standards. We have also improved coordination among market participants to support orderly market operations.

“We have initiated upgrades to market management systems to enable real-time operations, efficient settlement, and improved analytics. We have strengthened data transparency to support informed decision-making in the market space,” he added.

NISO was carved out of the Transmission Company of Nigeria as part of sweeping reforms introduced by the Electricity Act, 2023, to liberalise and decentralise Nigeria’s power sector.

The reform seeks to separate system operations from transmission ownership, improve transparency, and create a more competitive electricity market.

“As we enter our second year, our focus is clear—to translate these foundations into measurable
sector-wide impact. Our priorities include: deepening grid visibility and real-time operational control, strengthening system reliability and resilience, enhancing transparency and efficiency in market operations, enhancing data-driven and technology anchored system planning, supporting coordinated development of national and subnational electricity markets, advancing renewable integration and energy transition initiatives, continuing to invest in staff welfare and institutional capacity and ultimately, our success will be measured by three outcomes: a stable grid, a credible market, and strong investor confidence,” the MD concluded.

Despite these reforms, Nigeria’s power sector continues to face structural challenges, including transmission constraints, gas supply shortages, liquidity issues, and weak infrastructure.

NISO’s first-year performance signals a shift towards data-driven grid management and coordinated planning, although sustained investment and policy consistency will be required to deliver long-term stability.

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Tinubu approves N3.3trn to settle power sector debt

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President Bola Tinubu has approved the payment of ₦3.3 trillion, being accumulated debts owed to players in the power sector between February 2015 and March 2025.

Presidential spokesperson, Bayo Onanuga, said the debt repayment plan followed the final review of the legacy debts that have beset the power sector for more than a decade.

The statement noted that implementation has begun, with 15 power plants signing settlement agreements totalling ₦2.3 trillion.

“The Federal Government has already raised ₦501 billion to fund these payments. Out of the amount, N223 billion has been disbursed, with further payments underway.”

The initiative under the Power Sector Financial Reforms Programme is to ensure a fair and transparent resolution and ultimately, stimulate stable electricity generation and distribution.

The statement highlighted the far-reaching gains of the government’s commitment to the debt settlement.

“With the payments reaching the power value chain, generation will be more stable. With power plants supported, electricity reliability will improve. And as the sector stabilises, more investment, more jobs, and better service will follow.”

Shedding more light on this, Olu Arowolo-Verheijen, Special Adviser on Energy to President Tinubu, said,

“This programme is not just about settling legacy debts. It is about restoring confidence across the power sector — ensuring gas suppliers are paid, power plants can keep running, and the system begins to work more reliably.

“It is part of a broader set of reforms already underway — including better metering and service-based tariffs that link what you pay to the quality of electricity you receive.

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“The government is also prioritising power supply to businesses, industries, and small enterprises — because reliable electricity is critical to creating jobs, supporting livelihoods, and growing the economy.

“The goal is simple: more reliable power for homes, stronger support for businesses, and a system that works better for all Nigerians,” she added.

The statement further disclosed that President Tinubu has commended all stakeholders who supported efforts to resolve the legacy issues in the power sector.

He has also confirmed that the next phase (Series II) will begin this second quarter.

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Electricity tariff hike imminent as Gencos step up pressure

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Electricity generation companies have called on the Nigerian Electricity Regulatory Commission to urgently review electricity tariffs following the Federal Government’s recent increase in the domestic base price of gas, warning that delays could worsen liquidity challenges and distortions across the power sector.

The Chief Executive Officer of the Association of Power Generation Companies, Joy Ogaji, said operators were less concerned about the increase in gas prices itself, but more worried about regulatory delays in adjusting tariffs to accommodate the new cost reality.

Ogaji, speaking in an interview with our correspondent on Monday, described gas as a “pass-through cost” that must be captured transparently in tariff computations.

She said, “Gas price, whether it is raised to $10, is not really our problem. Gas is a feedstock and a pass-through cost. So if the regulator in the power sector is comfortable with the increase, it is not a problem for us because whatever we are charged, we pass it down to consumers.

“All we want is for NERC to acknowledge the new base price and input it into tariff calculations. There is now a clear difference between what we used to pay and the new price, and that gap must be recognised.”

Despite the push for tariff adjustment, Ogaji stressed that the core challenge in the sector remained poor payment discipline rather than pricing. “For us, whether the price is high or low is not the issue. What matters is whether payments are made for what is supplied.

Even when the price was low, what percentage of invoices were settled? If you increase the price and payments are still not made, what difference does it make?” she queried.

She further called for the establishment of what she described as “bankable demand” in the electricity market, arguing that the absence of a clear and reliable payment structure continues to deter investment. “We need to define bankable demand in the market. Until we do that, we cannot determine whether investor confidence will improve or whether new investors can come in.

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“Nigeria has over 200 million people, but how many are actually paying for electricity? And even among those who are paying, do we have transparency to verify those payments? There is no transparency anywhere,” she added.

Ogaji warned that without structural reforms, including stronger political will and enforcement, the sector risks stagnation. “If we are not careful and do not change the dynamics, we will still be discussing the same issues in two years. The President needs to take decisive action, possibly declare a state of emergency in the sector and give clear marching orders on what must be achieved,” she said.

Also speaking, the Executive Director of PowerUp Nigeria, Adetayo Adegbenle, said the increase in gas prices would inevitably translate to higher electricity tariffs and rising subsidy obligations. “Since the price of gas, which is the major fuel for Gencos, has increased, it is expected that electricity tariffs will also increase,” he said.

Adegbenle added that regardless of whether tariffs are immediately adjusted, the financial implications would still manifest in higher invoices from generation companies. “Whether electricity tariffs are reviewed or not, it is bound to affect invoices from Gencos. What we need to understand, however, is what the government’s plan is to absorb the shock of these expected changes.

“Subsidies, or market shortfalls, are expected to increase since invoice values will increase. I have no idea yet, but this is the point. I hope the government will encourage full market deregulation and implement a fully contract-based electricity market. I had planned to make this a national discourse at some point, because we cannot continue to pretend that the electricity market is not optimal,” he explained.

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He, however, questioned the Federal Government’s preparedness to absorb the fiscal impact of the changes. “We cannot continue to pretend that the electricity market is optimal. This situation also raises concerns about the sustainability of plans to raise bonds to offset debts owed to gas suppliers and Gencos. This is also another major argument against the bond being raised to pay off market exposure in terms of debt to gas suppliers and generating companies,” he added.

On his part, the President of the Nigeria Consumer Protection Network, Kunle Olubiyo, criticised the methodology behind the new gas pricing framework, describing it as inconsistent and lacking transparency. “The new base price is a bit confusing. The Nigerian Midstream and Downstream Petroleum Regulatory Authority had, from July last year, approved $1.13 as transport cost. So how do you now arrive at a figure that does not reflect the full pricing model?” he asked.

Olubiyo noted that when previous base prices are combined with transportation costs, the effective gas price should already be above $3 per unit. “It was around $2.15 last year, and when you add the $1.13 transport cost, it should be about $3.63. So whatever figure is being quoted now does not reflect the true cost,” he said.

He added that Nigeria’s power sector currently enjoys one of the lowest gas pricing regimes due to domestic supply obligations, despite global market pressures. “Gas is a commodity, just like petrol. In the international market, buyers are willing to pay up to $12 due to geopolitical tensions, especially in the Middle East. So why would any producer prefer to sell to Gencos locally, where they are often asked to be patriotic and even sell on credit?” he queried.

Olubiyo, however, argued that tariff increases alone would not resolve the sector’s deep-rooted inefficiencies. “Even before privatisation, we warned that tariff increases are not a silver bullet. There are fundamental issues affecting efficiency across the value chain,” he said.

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He pointed to widespread technical and commercial losses, particularly in metering and energy accounting, as major drivers of inflated costs. “There are significant leakages in how electricity is measured and billed. Many meters are obsolete and lack integrity. If we fix these issues and ensure accurate measurement, most of the claims by Gencos could drop by 40 to 50 per cent. What consumers are paying for today includes inefficiency and systemic leakages,” he added.

The Federal Government, through the Nigerian Midstream and Downstream Petroleum Regulatory Authority, last week reviewed the domestic base price of natural gas, a benchmark used in pricing gas supplied to power plants under the Domestic Gas Delivery Obligation framework.

The domestic gas pricing regime was originally designed to ensure an affordable and reliable gas supply to the power sector, with prices historically set below international market rates to support electricity generation. However, persistent payment shortfalls, mounting debts to gas suppliers, and rising global gas prices have triggered calls for a cost-reflective pricing model.

Industry data shows that gas accounts for over 70 per cent of Nigeria’s electricity generation mix, making it the single largest cost component in power production. Under the current structure, any increase in gas prices directly impacts the cost of generation, which is expected to be reflected in electricity tariffs unless subsidised by the government.

The latest price adjustment is aimed at incentivising gas producers to prioritise domestic supply, but warns that without corresponding reforms in tariff setting, payment assurance, and market transparency, the policy may further strain an already fragile electricity market.

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FG uncovered 45,000 ghost workers via BVN integration – Former Minister of Finance, Kemi Adeosun

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Former Minister of Finance, Kemi Adeosun, has revealed how the Federal Government used technology to eliminate large-scale payroll fraud, uncovering 45,000 “ghost workers” through the integration of the Bank Verification Number (BVN).

Speaking at the Citadel School of Government Dialogue series in Lagos, Adeosun explained that prior to the reform, the federal payroll was the government’s largest expenditure and was plagued by inefficiencies that earlier biometric efforts failed to resolve.

She noted that previous attempts to sanitise the payroll using biometric systems often stalled due to resistance from paramilitary institutions such as the Police and Army, which were reluctant to adopt centralised processes.

To overcome this, her team leveraged the existing BVN database instead of introducing a new biometric system.

“The payroll was our biggest cost,” Adeosun said. “Previous biometric efforts had stalled because paramilitary groups refused to cooperate. We bypassed this by using BVN data. We ran the federal payroll against the BVN database, and the result was staggering: we found 45,000 ‘ghost workers.’”

Clarifying the nature of the fraud, she explained that the term “ghost worker” often concealed simpler issues tied to weak systems and individual exploitation rather than highly organised networks.

“In many cases, it wasn’t a ‘ghost,’ but one person’s BVN linked to multiple salaries,” she said. “It wasn’t always a cartel. Sometimes it was inefficiency—people who had died or transferred but were still receiving salaries.”

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