Nigeria’s electricity sector faces a persistent shortage of reliable power, affecting homes and businesses. To address this, the Federal Government is proposing the Grid Asset Management Company Limited, a commercial vehicle, to unlock stranded generation capacity and strengthen transmission infrastructure.

For decades, Nigeria’s electricity sector has suffered from a paradox: billions of dollars invested in power infrastructure, yet millions of households and businesses still struggle with unreliable electricity.

Across the country, power plants built with public funds operate far below their installed capacity. Transmission lines often lack the capacity to evacuate the electricity generated, resulting in significant volumes of power being stranded.

Successive ministers of power have struggled to untangle Nigeria’s deeply entrenched electricity problems, with generation and distribution becoming a persistent burden of their tenures.

Nigeria’s electricity challenge is both structural and longstanding. Despite having an installed generation capacity estimated at over 13,000 megawatts, the actual power delivered to the national grid often fluctuates between 3,500 megawatts and 5,000 megawatts.

This shortfall stems from several interconnected problems: gas supply constraints affecting thermal plants, transmission bottlenecks limiting evacuation of generated power, poor maintenance regimes in many facilities, and weak commercial structures, including non-bankable power purchase agreements.

As a result, substantial infrastructure financed with public funds remains either underutilised or idle.

President Bola Tinubu, in a 6 March 2026, statement signed by the Special Adviser to the President on Information and Strategy, Bayo Onanuga, proposed Grid Asset Management Company Limited, designed as a response to this long-standing structural challenge.

The President constituted an 11-member committee to ensure the smooth incorporation of GAMCO, following the Federal Executive Council’s approval for the establishment of the company at its Wednesday, 4 March 2026, meeting.

The Chief of Staff to the President, Femi Gbajabiamila, who performed the inauguration on behalf of the President, said the committee was critical to the realisation of the President’s aspirations in Nigeria’s power sector, which was one of his campaign promises.

“The proposed establishment of GAMCO is one of the revolutionary steps taken by Mr President and this administration in the all-important power sector. We are here for the inauguration of the Committee on Grid Asset Management Company, which is basically to optimise and revolutionise power generation and, in particular, the grid and transmission sector,” the Chief of Staff said.

Gbajabiamila is the chairman of the committee, with the Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi (SAN); Minister of Power, Adebayo Adelabu; Minister of Works, David Umahi; and Minister of Finance, Wale Edun, as members.

Other members are the Minister of Communication and Digital Economy, Bosun Tijani; Minister of Science, Technology and Innovation, Kingsley Udeh (SAN); Minister of Aviation and Aerospace Development, Festus Keyamo; Minister of State (Petroleum), Heineken Lokpobiri; Chairman of the Nigeria Revenue Service, Zacchaeus Adedeji; and energy expert Prof. Yemi Oke.

The Permanent Secretary of the Cabinet Affairs Office, Dr John Chidiebere Ezeamama, is the committee’s secretary.

At the inauguration of the committee, Gbajabiamila said it would conduct a comprehensive review of existing laws, regulations, policies, and institutional frameworks governing the electricity value chain, including generation, transmission, distribution, and market operations.

“The committee will examine the implications of the Electricity Reform Laws (2025) and related unbundling arrangements on asset ownership, management, and regulatory oversight. It will identify areas of conflict, overlap, or inconsistency between the proposed GAMCO framework and extant legal and regulatory instruments.

“The committee will also assess the legal status, ownership structure, and contractual obligations of the Niger Delta Power Holding Company and National Integrated Power Project assets, including the Omotosho, Olorunshogo, and Ihovbor plants, which GAMCO plans to use for its pilot phase.

“It will evaluate the interface between GAMCO’s proposed mandate and the statutory functions of the Nigeria Electricity Regulatory Commission and determine the fiscal, financial, and market implications of the proposal, including subsidy exposure, market liquidity, and revenue frameworks.

“In addition, the committee will determine whether the establishment and operationalisation of GAMCO require amendments to primary legislation, subsidy regulations, and executive directives,” he said.

The GAMCO proposal seeks to unlock underutilised electricity capacity and improve power supply without requiring immediate investment in new power plants. By revitalising existing assets, GAMCO aims to deliver more reliable electricity to homes and businesses, reduce waste of public investment, and attract private sector participation, ultimately supporting economic growth.

At its core, GAMCO represents a shift in thinking: instead of building new infrastructure first, the government wants to extract value from assets already in place.

As the policy concept driving the initiative states: “The cheapest megawatt is the one already built but not working.”

Recovering power already built

Nigeria has invested heavily in the National Integrated Power Projects, which were conceived in the mid-2000s to address the country’s chronic electricity shortage. Funded largely through excess crude oil revenues, the projects resulted in several gas-fired power plants across the country.

However, many of these plants have struggled with operational challenges ranging from gas supply constraints and maintenance gaps to transmission evacuation bottlenecks.

For example, some plants operate far below their installed capacity, while others experience long periods of inactivity due to gas supply disruptions.

The proposed GAMCO structure aims to address these issues by transforming stranded government-owned power assets into commercially viable projects capable of attracting private investment.

According to the proposal currently under review by an interministerial committee, the company will be fully owned by the Federal Government through the Ministry of Finance Incorporated.

Unlike a traditional government agency, GAMCO will operate as a commercially structured entity incorporated under the Companies and Allied Matters Act, designed to mobilise private capital through ring-fenced project financing structures.

Its mandate is narrowly focused: optimise existing assets and turn them into reliable megawatts delivered to the national grid.

The Benin–Lagos corridor pilot

The initiative will begin with a pilot project focused on one of the most economically strategic parts of Nigeria’s electricity system — the Benin–Lagos transmission corridor.

This corridor supplies electricity to Lagos and Ogun states, Nigeria’s industrial and commercial heartland, where power demand is among the highest in the country.

The pilot phase will focus on three major NIPP power plants: Omotosho Power Plant, with 513 MW installed capacity; Olorunsogo Power Plant, having 754 MW installed capacity; and Ihovbor Power Plant, with 508 MW installed capacity. Together, the plants represent one of the largest clusters of underutilised generation capacity in Nigeria.

Collectively, the plants have a combined installed capacity of 1,775 megawatts, but much of this capacity remains underutilised.

By focusing on three key NIPP plants, the GAMCO pilot aims to demonstrate that existing infrastructure can be revitalised and made commercially productive.

Through operational improvements, gas supply agreements, maintenance upgrades and improved transmission evacuation, the government believes GAMCO can recover at least 1,600MW within 18 to 24 months.

If achieved, this would represent a significant increase in electricity available to the national grid.

New transmission model

One of the most critical barriers to improved electricity supply in Nigeria is the transmission network. While generation capacity has expanded in recent years, the transmission grid has struggled to keep pace.

Beyond improving generation, the initiative also proposes a major shift in how transmission infrastructure is developed.

Nigeria’s power system traditionally builds transmission lines linked to individual power plants. If that line fails, the plant effectively loses its ability to evacuate electricity. Experts often describe the grid as the weakest link in Nigeria’s electricity value chain.

GAMCO proposes a different model, a shared high-capacity transmission corridor. Transmission bottlenecks can result in situations where power plants are technically capable of generating electricity but cannot transmit it to demand centres due to limited grid capacity.

The pilot project will include the development of a new high-voltage 330kV+ double-circuit transmission line along the Benin–Lagos axis, designed as open-access infrastructure capable of carrying electricity from multiple power plants. Strengthening this transmission route could therefore have an outsized impact on economic productivity.

Historically, Nigeria’s grid development has followed a plant-by-plant evacuation strategy, where each generator is connected to the grid through a dedicated transmission line. A fault on a single evacuation line can shut down an entire plant.

Rather than serving a single generator, the corridor model would allow multiple power producers, gas, hydro, solar or wind, to connect to the same network.

This approach mirrors transmission strategies adopted in other countries to accelerate electricity expansion and improve grid flexibility.

Fixing bottlenecks without building new plants

A key argument behind the GAMCO concept is economic. Building a new 1,600MW power plant could cost more than $3.3bn and take five to seven years to complete. Optimising existing plants, by contrast, could deliver equivalent capacity in under three years at a significantly lower cost.

The government also notes that global supply shortages in gas turbines mean new plants cannot be delivered quickly, even if funding were available.

Nigeria, however, already owns the turbines installed in NIPP plants. The challenge lies in improving their availability, ensuring a reliable gas supply, and strengthening evacuation infrastructure.

Partnership with existing institutions

The proposed company will not replace existing power sector institutions. The Niger Delta Power Holding Company will remain the owner of the NIPP plants, while the Transmission Company of Nigeria will retain responsibility for the national grid.

GAMCO will, however, operate through contractual partnerships with both institutions.

NDPHC is expected to grant GAMCO concession and lease arrangements for the selected power plants, enabling operational improvements and commercial restructuring.

TCN, on the other hand, will grant GAMCO the right to develop and operate the new transmission corridor, with the assets ultimately strengthening TCN’s grid capacity.

The arrangement allows the new company to mobilise private financing for infrastructure projects that existing public institutions often struggle to fund.

Financing without sovereign debt

One of the central design features of the initiative is its financing structure. Rather than relying on direct government borrowing, GAMCO is intended to raise funding through project finance backed by ring-fenced revenue streams.

Rather than relying primarily on government funding or sovereign borrowing, the initiative aims to attract domestic and international private investment. Projects will be structured so that each asset, whether a power plant upgrade or a transmission line, has its own dedicated revenue streams.

These “ring-fenced” structures are designed to make projects bankable, allowing investors to fund them based on projected cash flows rather than government guarantees.

The Renewed Hope Infrastructure Development Fund’s power team is expected to oversee the institutionalisation and governance framework of the company.

Potential template for national expansion

The government views the pilot phase as a proof of concept. If successful, the model could be extended to other underperforming plants and transmission corridors across the country.

The goal is to create a scalable framework capable of unlocking dormant electricity assets nationwide while strengthening Nigeria’s power infrastructure without placing additional pressure on public finances.

Ultimately, the success of GAMCO will depend not only on technical execution but also on regulatory coordination, commercial discipline and investor confidence.

By increasing available grid power, initiatives such as GAMCO could potentially lower energy costs for industries, improve productivity for manufacturers, support small and medium enterprises and reduce reliance on self-generated power.

For households, improved electricity reliability could also translate into better living standards and reduced energy expenses.

What comes next?

Some energy experts have, however, cautioned the Federal Government against the proliferation of agencies in the power sector. A report quoted the Executive Director of PowerUp Nigeria, a consumer advocacy group, Adetayo Adegbemle, as saying the creation of GAMCO creates more questions than answers in resolving the situation in the country.

He asked, “What is happening with the Presidential Power Initiative/FGNPowerCo? Is there not an overlap of functions with GAMCO? What is the end idea of this GAMCO? How does GAMCO interface with other stakeholders? If GAMCO is headed by the Chief of Staff, is it a board-like role, and will there be a working office? How does GAMCO interface with the Ministry of Power? What powers exactly does this constituted committee hold? Is it advisory or executive? Where does the Nigeria Integrated Energy Plan by EA2023 come in all of these?”

A member of the committee and a Professor of energy law at the Faculty of Law, University of Lagos, Yemi Oke, however, believed GAMCO occupies a different space, adding that the proposed company will not displace any existing institution.

Speaking to The PUNCH on what GAMCO is designed to solve, which existing institutions have been unable to address, he said, “GAMCO exists to solve both the generation and transmission problems.

“Nigeria has power plants that are built but not producing at full capacity and transmission corridors that are needed but not yet funded. GAMCO exists to solve both problems at the same time. NDPHC and TCN each have clearly defined mandates: NDPHC owns and manages generation assets, and TCN operates and maintains the national grid. GAMCO occupies a different space entirely. It is a commercial structuring and capital mobilisation vehicle that complements what these institutions do. It brings private capital, firm gas contracts, creditworthy off-takers, and international infrastructure investors into the sector. No existing institution was designed to do all of these things simultaneously, because that was never its mandate. GAMCO fills that gap without duplicating or displacing any existing institution.”

On why the government decided to prioritise recovering stranded capacity instead of investing in new power plants, Prof. Oke said, “Recovering stranded capacity is faster, cheaper, and makes more economic sense. There is a well-known principle in the energy industry: the cheapest megawatt is the one you have already built. Nigeria already has 1,775MW of installed capacity across three plants that can be restored to full operation. New power plants cost up to $2,350 per kilowatt to build, take five to seven years to complete, and face a global turbine shortage where demand exceeds production capacity. By contrast, rehabilitating existing plants and securing firm gas can deliver recovered megawatts within 24 months at a significantly lower cost. To put it simply: it does not make sense to build a new house when you have a perfectly good one that just needs the roof fixed, the gas connected, and a tenant signed up.”

Speaking further, Oke said the target is to raise the availability of the three power plants from their current levels to 90 per cent or above within the proposed timeline.

“This is not speculative. The turbines at Omotosho, Olorunsogo, and Ihovbor are sound assets that require targeted investment, a firm gas supply, and contracted offtake to reach their full potential. These are commercial and contractual challenges, not fundamental engineering problems. GAMCO addresses all three simultaneously: capital for upgrades and maintenance, firm take-or-pay gas contracts with upstream producers, and bilateral power purchase agreements with creditworthy industrial customers who pay on time. Global precedents confirm this is achievable. South Africa’s IPP Office, with just 30 staff, mobilised $14bn in private capital. India’s transmission programme delivered over 40,000 circuit-kilometres through private developers. GAMCO follows the same proven model.”

Speaking on the Benin-Lagos corridor as the starting point for the pilot project, Prof. Oke described the corridor as the commercial and industrial heartland of Nigeria, which carries nearly a quarter of the country’s total electricity demand, accounts for 27.4 per cent of Nigeria’s non-oil GDP, and is home to 28.4 per cent of the country’s manufacturing output.

According to him, the demand along the corridor is projected to reach 6,133 megawatts by 2030 and is growing at 11.5 per cent per year.

“The three NIPP plants, Omotosho in Ondo, Olorunsogo in Ogun, and Ihovbor in Edo, all sit directly on this corridor. Starting here delivers the highest economic impact in the shortest time. However, GAMCO is not limited to this corridor. The model is designed to extend to the South East to South-South corridor, which has nearly 6,735 MW of installed generation capacity across the gas-rich Niger Delta, and to the northern corridor, which would catalyse Nigeria’s extensive hydropower and solar resources,” he said.

Speaking further on how GAMCO will change the way electricity is generated and transmitted in Nigeria, Prof. Oke said GAMCO will invest capital to bring three NIPP plants to their full operating potential, sign firm gas supply contracts so the plants have reliable fuel and negotiate power purchase agreements directly with large industrial customers.

He said the development will create a commercially self-sustaining revenue stream for the plants, as it also plans to develop a new high-capacity transmission line along the pilot corridor.

According to Prof. Oke, GAMCO will not build the line itself. It will, instead, bring in experienced international transmission operators and infrastructure investors to build, own, and operate the line as a complement to the existing grid. TCN gains additional corridor capacity that strengthens the national network.

“The end result for Nigerians is straightforward; plants that are currently underperforming will produce reliable electricity, and a new transmission line will carry that electricity to the homes and businesses that need it most,” he said.

Prof. Oke also spoke on three constraints, which he said are solvable. According to him, “There are three constraints, and none of them are unsolvable. First, the plants need targeted investment in maintenance and component upgrades to restore turbine performance to design specifications. Second, the plants need a firm, controlled gas supply. Like most gas-fired plants in Nigeria, they have historically relied on spot gas procurement, which does not support consistent operations. Third, the plants need creditworthy off takers who are contractually committed to paying for the electricity they consume.

“GAMCO solves all three in one integrated programme: private capital for the plant upgrades, firm take-or-pay gas contracts with upstream producers, and bilateral agreements with creditworthy industrial buyers. GAMCO provides the commercial structuring and capital that turn these assets into revenue-generating infrastructure for the benefit of all three tiers of government.”

Speaking on financing, Prof. Oke said the government is targeting domestic banks, pension funds, and even international infrastructure investors, depending on the stage.

“For the transmission programme, GAMCO is targeting three categories of co-equity sponsors: international transmission operators such as Power Grid Corporation of India, Sterlite Power, and Adani Energy Solutions; infrastructure investors such as Africa50, the International Finance Corporation, and Meridiam, who provide long-term patient capital; and development finance partners such as IFC InfraVentures and British International Investment’s Gridworks platform, who bring concessional finance. Nigerian institutional investors, including pension funds and insurance companies, could participate through the debt instruments,” he said.

Also speaking, the CEO of Cabtree, an energy consultancy firm, Mr Olabode Sowunmi, noted that the real fundamental issues of the power sector stemmed from the inefficiencies among the generation companies, the transmission companies and the distribution companies, with everybody blaming one another and all of them gaming the country.

Sowunmi, who is also the chairman of the Energy Transition Study Group of the Nigerian Gas Association, lamented that the generation, distribution and transmission companies did not invest in infrastructure over the years, adding that it was so bad that the infrastructure from when the old National Electric Power Authority existed is even better than what it currently is.

The energy expert said the government prioritising recovering stranded capacity instead of investing immediately in new power plants is about what is cheaper and what is going to be effective.

“So, really and truly, anybody can choose whichever option they want in terms of whether the government chooses to go after stranded assets or not. But you want to look at the overall view of the industry or the sector, what is practical and all that, and then choose. That is a judgement call, really. So, if you were sitting there in a government position, you might or might not choose a different thing. But everybody wants to look at what the issue is and then choose what they believe is best for the country, which I believe is what the government has done,” he said.

Sowunmi, however, believed that unlocking the 1,600MW from the selected NIPP plants is a tall order, primarily because of the challenges involved in terms of infrastructure.

“It is not impossible, but it is a tall order because of the financial requirements to evacuate power, and then it is going to be dependent on whether that power is going to the national grid or not. So there are multiple factors, but it is not impossible.

“Achieving that depends on how much support they have, how much time they have and how much money is made available to them. Those are the things that will determine whether the thing will really work or not,” Sowunmi said.

Speaking on the capacity of Omotosho and others on the Benin-Lagos corridor, Sowunmi said, “For Omotosho and others, I am speaking honestly from my understanding: the issue is more about the capacity of the value chain. For some of them, they are actually able to operate at full capacity after proper servicing and maintenance, but the electricity they generate cannot be evacuated. In other words, the transmission and distribution companies cannot take or utilise the power. And if they cannot use it, what exactly are they transmitting?

“So, it is better than they do not produce at all, because even if they generate the electricity and transmit it, the distribution companies may not be able to take it either. This could be because distribution capacity is limited or because the consumers they supply cannot pay. What this means is that there could be a grid failure. Grid failure does not occur only when there is excessively high voltage that forces the system to shut down to protect itself from damage or collapse,” he added.

Sowunmi argued that Nigerian banks may be unable to finance the initiative due to high interest rates, noting that such rates are unsuitable for funding infrastructure projects of that scale.

“I would not know the kind of investors the government is targeting, but definitely not Nigerian banks. Nigerian banks borrow money at about 30 per cent, and you cannot develop infrastructure with that kind of interest rate. So, they have to look for patient capital—investors who are willing to lend at around five per cent over 30 years. Those are the kinds of options to consider. How to secure such financing may be difficult, but that is what needs to be done. It certainly cannot be achieved with the kind of interest rates we currently have in the country,” he concluded.