Electric Power Sector Reform Act, 2005
Act · Energy
Policy date: 2013-01-01
An Act restructures Nigeria's electricity sector by establishing a competitive market and creating the regulatory body NERC. It targets electricity generation, transmission, and distribution companies, along with private investors and consumers. This aims to improve reliability and attract investment in the power sector.
Electric Power Sector Reform Act, 2005
What Is This Policy?
The foundational legislation that restructured Nigeria's electricity industry from a government monopoly into a competitive market, establishing NERC, unbundling PHCN into successor companies, and creating the framework for private sector participation in generation and distribution.
Who Does It Target?
Electricity generation, transmission, and distribution companies Private investors in the power sector NERC as the independent regulator Electricity consumers across Nigeria
What Does It Aim to Achieve?
Reform the Nigerian electricity sector to improve reliability, attract private investment, establish cost-reflective tariffs, and create a competitive market for electricity generation and distribution.
Key Features
NERC Establishment: Creation of an independent regulatory commission for the electricity industry Unbundling: Separation of the former PHCN into 6 generation companies (GenCos), 1 transmission company (TCN), and 11 distribution companies (DisCos) Privatization: Framework for the sale of generation and distribution assets to private operators Licensing Framework: Different license categories for generation, transmission, distribution, and trading Tariff Regulation: Multi-year tariff order methodology for cost-reflective electricity pricing
Current Status
Rollout Stage: Fully implemented; privatization completed in 2013 Coverage: Entire electricity value chain Lead Agency: Bureau of Public Enterprises (privatization), NERC (regulation) Ongoing: Continued market development, tariff reviews, and performance improvement
How to Access
The Act is a public law. Access through the Official Gazette and legal databases NERC publishes implementing regulations on its website
Official Resources
Website: nerc.gov.ng Contact: NERC, Abuja
Legal Framework
The Electric Power Sector Reform Act (EPSR) 2005 was the primary electricity legislation, establishing NERC and the unbundling of PHCN. It was superseded by the Electricity Act 2023. The Act operated under the 1999 Constitution (Item 14 of the Exclusive Legislative List — electricity generation/transmission) and aligned with World Bank power sector reform models and the ECOWAS Energy Protocol on electricity market liberalisation.