President Bola Ahmed Tinubu has assented to the Electricity Act 2023, which was initially passed by lawmakers in July 2022.

The Electricity Act will replace the Electric Power Sector Reform Act (EPSRA), 2005.

The new Electricity Act will enable the de-monopolization of Nigeria’s electricity generation, transmission, and distribution of electricity at the National level and empower states, companies, and individuals to generate, transmit and distribute electricity. This means anyone may construct, own, or operate an undertaking for generating electricity not exceeding one megawatt in aggregate at a site, or an undertaking for distribution of electricity with a capacity not exceeding 100 kilowatts in aggregate at a site, or such other capacity as the Commission may determine from time to time, without a licence.

The act empowers states, companies, and individuals to generate, transmit and distribute electricity. It also gives states power to regulate their electricity markets by issuing licences to private investors who can operate mini-grids and power plants within the state.

For now, only three states - Lagos, Edo and Kaduna—have electricity market laws and can start regulating their markets. But for other states without such laws, NERC will regulate their electricity generation and transmission.