Senate declares power sector privatisation a ‘total failure’, threatens policy reversal

The Senate on Thursday condemned the privatization of Nigeria’s power sector as a ‘total failure’ and hinted at possible legislative actions to overturn the policy.

Lawmakers heavily criticised power sector operators, including Generation Companies (GenCos), the Transmission Company of Nigeria (TCN), and Distribution Companies (DisCos), accusing them of failing to provide reliable electricity and contributing little value to the sector.

The Senate argued that the 2013 privatization initiative has worsened the country’s power crisis, leaving Nigerians with no effective solutions and deepening the nation’s energy woes.

The resolutions of the Senate followed the presentation and consideration of a report by the Senate Committee on Power during plenary, which investigated frequent national grid collapses and related issues.

The Chairman of the Committee, Senator Enyinnaya Abaribe (APGA, Abia South), who presented the report, attributed the persistent grid collapses to factors such as aging infrastructure, abandoned projects worth trillions of naira, regulatory inefficiencies, security lapses, lack of modern monitoring systems like SCADA, and inadequate financial oversight.

Abaribe lamented that despite substantial investments in electricity infrastructure, the grid has suffered 105 collapses over the past decade.

He revealed the significant costs incurred during grid failures, particularly in restarting power plants.

According to the report, restarting a plant after a grid collapse (known as a ‘black start) is considerably more expensive than normal operations.

For instance, while running costs for a plant like Azura, Delta, or Shiroro are approximately $105,000, restarting costs can reach $7 million per incident.

Collectively, grid collapses cost Nigeria an estimated ₦42.5 billion for these three plants alone, with broader implications for the entire power sector.

The report said that the National Grid, which is over 50 years old, is outdated and in urgent need of modernization to meet current operational standards.

Abaribe also noted other pressing issues, including operational inefficiencies, abandoned projects, regulatory gaps, security challenges, and the absence of  Supervisory Control and Data Acquisition (SCADA) systems essential for real-time monitoring and management.

Abaribe said: “Whenever a plant is shut down, they restart the plant and to restart it which they call a black start, it cost far more than running the plant.

“While it cost $105,000 to run the plant, to restart it will cost $7m. So for anytime we have a shut down occasioned by grid collapse, three plants in Nigeria that supply most of our electricity, Azura, Delta and Shiroro, to restart the plant cost Nigeria $25m or ₦42.5bn and if we expand it to the rest of the operating plants in Nigeria, it is actually not quantifiable.

“Aging infrastructure has been identified as a critical factor contributing to frequent grid failures. Many components of the grid are outdated and have not undergone necessary maintenance or upgrades, leading to increased vulnerability to failures.”

Contributing to the debate, Senator Adams Oshiomhole (APC, Edo North), criticised the privatisation policy as flawed and exploitative, stating it imposed undue financial burdens on Nigerians.

“The Discos are out for profit while they make our people suffer. I never imagined that a private person will collect money for services he did not render and Nigerians are helpless,” Oshiomhole said.

He recounted a personal experience of having to purchase a transformer and pay for its installation, only for it to become the property of the Abuja Electricity Distribution Company (AEDC).

Oshiomhole called for a comprehensive review of the privatisation policy in line with the administration’s “Renewed Hope Agenda.”

“After the procurement, it becomes the property of AEDC (Abuja Electricity Distribution Company). I even had to pay money from my pocket to connect the transformer to the grid.

“We have to revisit this ill-advised privatisation and we are going to advise Mr President in line with his Renewed Hope Agenda, to review the power sector privatisation,” Oshiomhole said.

On his part, Senator Abdul Ningi (PDP – Bauchi Central) added that the ongoing failures in the power sector persist due to a lack of accountability.

He argued that without sanctions for lapses, the sector’s inefficiencies would remain unaddressed.

He said, “Over the years, nobody has been punished for the lapses of the power sector. Reports alone without sanctions will not allow Nigeria to make any headway. The implication is that the problems will continue.”

After spirited debate on the report, during plenary the Senate stood down the consideration of the report and gave Abaribe’s committee additional six weeks to do a holistic investigation into the issues in the power sector and report back for further legislative actions.