FG moves to create Energy Zones for 24-hour power in Lagos, Abuja-Kaduna-Kano, Enugu-Port-Harcourt
By Aboki Forex —
The Federal Government is advancing plans to establish Energy Zones in Nigeria’s highest-demand areas as part of efforts to deliver stable, 24-hour electricity to homes, businesses and industries. Minister of Power Joseph Tegbe discussed the proposed zones at a recent strategic meeting with the leadership of selected electricity distribution companies, focusing on improving the distribution end of the power value chain.
The initiative targets the Lagos axis, Abuja-Kaduna-Kano and Enugu-Port-Harcourt corridors. It is intended to address distribution constraints, unlock commercial and industrial demand, and improve DisCo revenue and collections.
Energy Zones target high-demand areas
Tegbe said challenges in Nigeria’s electricity sector extend beyond generation and transmission to the amount of power that can be taken up and delivered to consumers through the distribution network. The proposed Energy Zones are designed to strengthen infrastructure in areas with significant electricity demand and ensure available supply can reach consumers.
The government intends to build up infrastructure in these high-demand locations so that electricity supply can keep pace with estimated demand as the economy grows. The initiative is also expected to unlock additional commercial and industrial demand while strengthening the financial position of DisCos through improved revenue collection.
The meeting was attended by the leadership of Abuja Electricity Distribution Company (AEDC), Ikeja Electric, Eko Power Ltd, Ibadan Electricity Distribution Company (IBEDC) and Sahara Energy Group. The engagement forms part of the minister’s stated commitment to applying a disciplined and sequenced approach to addressing challenges across the electricity sector.
DisCos face N1.36 trillion revenue gap
The proposed Energy Zones come against a backdrop of significant revenue gaps within Nigeria’s electricity distribution market. According to data from the Nigerian Electricity Regulatory Commission (NERC), the 11 DisCos supplied electricity valued at N3.68 trillion in 2025 but billed customers N2.99 trillion and collected N2.32 trillion.
About N694.8 billion of the gap represented electricity that was supplied but not billed. A further N669.49 billion represented electricity that was billed but for which payment was not recovered. The combined difference between electricity supplied and revenue collected amounted to about N1.36 trillion.
The figures highlight the distribution and collection challenges the proposed Energy Zones are intended to address by improving the ability of high-demand areas to absorb and pay for available electricity.
Tariff stance and legacy debt plan
The Energy Zones plan follows the government’s broader focus on stabilising the electricity value chain while improving supply and market discipline. Tegbe recently said the Federal Government had no immediate plan to increase electricity tariffs as the administration prioritises these objectives.
In December, the Federal Government issued the first bond under the Presidential Power Sector Debt Reduction Programme, marking a major step toward resolving payment arrears in Nigeria’s electricity industry. The government plans to issue up to N4 trillion in government-backed bonds to settle legacy debts owed to electricity generation companies and gas suppliers. The strategy has triggered concerns in some quarters over a potential debt-for-debt risk.
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The plan is intended to unlock commercial and industrial demand and improve DisCo collections. For Nigerian businesses in the targeted corridors, the key test will be whether the infrastructure upgrades can translate into reliable supply and better collections.