The Federal Executive Council has approved the incorporation of the Grid Asset Management Company Limited(GAMCO) as part of a new effort to tackle Nigeria’s long-standing electricity challenges.
The commercially structured company will focus on reviving underperforming government-owned power plants and addressing major bottlenecks in the national grid.
According to officials, the initiative could recover about 1,600 megawatts of electricity within two years by rehabilitating existing power assets that are currently underutilised.
Nigeria’s electricity sector has undergone several reforms since the early 2000s, including the 2013 privatisation of generation and distribution companies, which was expected to attract private investment and improve efficiency. However, the sector has continued to struggle with financial and operational difficulties.
GAMCO’s pilot phase will target three gas-fired plants developed under the National Integrated Power Project (NIPP): Omotosho (513MW), Olorunsogo (754MW) and Ihovbor (508MW). Although these plants have a combined installed capacity of about 1,775 megawatts, they are currently operating at near-zero levels due to issues such as unreliable gas supply, poor maintenance and the absence of bankable power purchase agreements.
Beyond plant rehabilitation, GAMCO will also construct a high-capacity double-circuit transmission line along the Benin–Lagos corridor, one of the most congested routes in the national grid linking power generation hubs in southern Nigeria to major industrial centres in Lagos and Ogun states.
Nigeria has an installed electricity generation capacity of more than 13,000 megawatts, yet only a fraction is typically delivered through the grid, forcing businesses and households to rely heavily on diesel generators.
The project is being driven by the Renewed Hope Infrastructure Development Fund power team, which said GAMCO will raise financing through project finance structures involving debt and equity, rather than relying on sovereign borrowing. Shares in the company will be held by the Ministry of Finance Incorporated on behalf of the federal government.
Under the arrangement, the Niger Delta Power Holding Company will retain ownership of the NIPP plants, while the Transmission Company of Nigeria will continue managing the national grid.
Officials argue that rehabilitating existing plants is significantly cheaper and faster than building new ones. Constructing a new 1,600MW gas power plant could cost about $3.36 billion and take between five and seven years, while restoring the existing NIPP facilities could deliver similar output in less than three years.
However, analysts warn that the success of the initiative will depend on resolving the sector’s persistent financial problems, particularly the inability of electricity distribution companies to collect sufficient revenue and pay for power supplied.
The pilot project is expected to serve as a proof of concept, with the government hoping that successful implementation will attract private investment and enable the expansion of similar projects across other power plants and transmission corridors nationwide.
