Energy reset: How GAMCO might unlock 1,600MW

Nigeria’s electrical energy sector faces a persistent scarcity of dependable energy, affecting houses and companies. To handle this, the Federal Authorities is proposing the Grid Asset Administration Firm Restricted, a business car, to unlock stranded technology capability and strengthen transmission infrastructure. LAOLU AFOLABI examines the rationale, expectations, and potential influence of the proposal.

For many years, Nigeria’s electrical energy sector has suffered from a paradox: billions of {dollars} invested in energy infrastructure, but tens of millions of households and companies nonetheless battle with unreliable electrical energy.

Throughout the nation, energy crops constructed with public funds function far under their put in capability. Transmission strains typically lack the capability to evacuate the electrical energy generated, leading to vital volumes of energy being stranded.

Successive ministers of energy have struggled to untangle Nigeria’s deeply entrenched electrical energy issues, with technology and distribution turning into a persistent burden of their tenures.

Nigeria’s electrical energy problem is each structural and longstanding. Regardless of having an put in technology capability estimated at over 13,000 megawatts, the precise energy delivered to the nationwide grid typically fluctuates between 3,500 megawatts and 5,000 megawatts.

This shortfall stems from a number of interconnected issues: gasoline provide constraints affecting thermal crops, transmission bottlenecks limiting evacuation of generated energy, poor upkeep regimes in lots of services, and weak business constructions, together with non-bankable energy buy agreements.

Because of this, substantial infrastructure financed with public funds stays both underutilised or idle.

President Bola Tinubu, in a 6 March 2026, assertion signed by the Particular Adviser to the President on Info and Technique, Bayo Onanuga, proposed Grid Asset Administration Firm Restricted, designed as a response to this long-standing structural problem.

The President constituted an 11-member committee to make sure the sleek incorporation of GAMCO, following the Federal Govt Council’s approval for the institution of the corporate at its Wednesday, 4 March 2026, assembly.

The Chief of Staff to the President, Femi Gbajabiamila, who carried out the inauguration on behalf of the President, stated the committee was crucial to the realisation of the President’s aspirations in Nigeria’s energy sector, which was one among his marketing campaign guarantees.

“The proposed institution of GAMCO is likely one of the revolutionary steps taken by Mr President and this administration within the all-important energy sector. We’re right here for the inauguration of the Committee on Grid Asset Administration Firm, which is principally to optimise and revolutionise energy technology and, particularly, the grid and transmission sector,” the Chief of Employees stated.

Gbajabiamila is the chairman of the committee, with the Legal professional-Common 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.

Different members are the Minister of Communication and Digital Economic system, Bosun Tijani; Minister of Science, Expertise and Innovation, Kingsley Udeh (SAN); Minister of Aviation and Aerospace Growth, Festus Keyamo; Minister of State (Petroleum), Heineken Lokpobiri; Chairman of the Nigeria Income Service, Zacchaeus Adedeji; and power skilled Prof. Yemi Oke.

The Everlasting Secretary of the Cupboard Affairs Workplace, Dr John Chidiebere Ezeamama, is the committee’s secretary.

On the inauguration of the committee, Gbajabiamila stated it might conduct a complete assessment of current legal guidelines, laws, insurance policies, and institutional frameworks governing the electrical energy worth chain, together with technology, transmission, distribution, and market operations.

“The committee will look at the implications of the Electrical energy Reform Legal guidelines (2025) and associated unbundling preparations on asset possession, administration, and regulatory oversight. It can establish areas of battle, overlap, or inconsistency between the proposed GAMCO framework and extant authorized and regulatory devices.

“The committee may even assess the authorized standing, possession construction, and contractual obligations of the Niger Delta Energy Holding Firm and Nationwide Built-in Energy Undertaking belongings, together with the Omotosho, Olorunshogo, and Ihovbor crops, which GAMCO plans to make use of for its pilot section.

“It can consider the interface between GAMCO’s proposed mandate and the statutory capabilities of the Nigeria Electrical energy Regulatory Fee and decide the fiscal, monetary, and market implications of the proposal, together with subsidy publicity, market liquidity, and income frameworks.

“As well as, the committee will decide whether or not the institution and operationalisation of GAMCO require amendments to main laws, subsidy laws, and government directives,” he stated.

The GAMCO proposal seeks to unlock underutilised electrical energy capability and enhance energy provide with out requiring instant funding in new energy crops. By revitalising current belongings, GAMCO goals to ship extra dependable electrical energy to houses and companies, scale back waste of public funding, and appeal to personal sector participation, finally supporting financial progress.

At its core, GAMCO represents a shift in considering: as an alternative of constructing new infrastructure first, the federal government desires to extract worth from belongings already in place.

Because the coverage idea driving the initiative states: “The most cost effective megawatt is the one already constructed however not working.”

Recovering energy already constructed

Nigeria has invested closely within the Nationwide Built-in Energy Initiatives, which had been conceived within the mid-2000s to deal with the nation’s continual electrical energy scarcity. Funded largely by way of extra crude oil revenues, the tasks resulted in a number of gas-fired energy crops throughout the nation.

Nevertheless, many of those crops have struggled with operational challenges starting from gasoline provide constraints and upkeep gaps to transmission evacuation bottlenecks.

For instance, some crops function far under their put in capability, whereas others expertise lengthy intervals of inactivity resulting from gasoline provide disruptions.

The proposed GAMCO construction goals to deal with these points by reworking stranded government-owned energy belongings into commercially viable tasks able to attracting personal funding.

Based on the proposal at the moment below assessment by an interministerial committee, the corporate might be totally owned by the Federal Authorities by way of the Ministry of Finance Integrated.

Not like a conventional authorities company, GAMCO will function as a commercially structured entity included below the Corporations and Allied Issues Act, designed to mobilise personal capital by way of ring-fenced venture financing constructions.

Its mandate is narrowly targeted: optimise current belongings and switch them into dependable megawatts delivered to the nationwide grid.

The Benin–Lagos hall pilot

The initiative will start with a pilot venture targeted on some of the economically strategic components of Nigeria’s electrical energy system — the Benin–Lagos transmission hall.

This hall provides electrical energy to Lagos and Ogun states, Nigeria’s industrial and business heartland, the place energy demand is among the many highest within the nation.

The pilot section will concentrate on three main NIPP energy crops: Omotosho Energy Plant, with 513 MW put in capability; Olorunsogo Energy Plant, having 754 MW put in capability; and Ihovbor Energy Plant, with 508 MW put in capability. Collectively, the crops signify one of many largest clusters of underutilised technology capability in Nigeria.

Collectively, the crops have a mixed put in capability of 1,775 megawatts, however a lot of this capability stays underutilised.

By specializing in three key NIPP crops, the GAMCO pilot goals to display that current infrastructure will be revitalised and made commercially productive.

By operational enhancements, gasoline provide agreements, upkeep upgrades and improved transmission evacuation, the federal government believes GAMCO can get well a minimum of 1,600MW inside 18 to 24 months.

If achieved, this could signify a big enhance in electrical energy out there to the nationwide grid.

New transmission mannequin

One of the vital crucial limitations to improved electrical energy provide in Nigeria is the transmission community. Whereas technology capability has expanded in recent times, the transmission grid has struggled to maintain tempo.

Past enhancing technology, the initiative additionally proposes a serious shift in how transmission infrastructure is developed.

Nigeria’s energy system historically builds transmission strains linked to particular person energy crops. If that line fails, the plant successfully loses its means to evacuate electrical energy. Specialists typically describe the grid because the weakest hyperlink in Nigeria’s electrical energy worth chain.

GAMCO proposes a special mannequin, a shared high-capacity transmission hall. Transmission bottlenecks can lead to conditions the place energy crops are technically able to producing electrical energy however can’t transmit it to demand centres resulting from restricted grid capability.

The pilot venture will embrace the event of a brand new high-voltage 330kV+ double-circuit transmission line alongside the Benin–Lagos axis, designed as open-access infrastructure able to carrying electrical energy from a number of energy crops. Strengthening this transmission route might subsequently have an outsized influence on financial productiveness.

Traditionally, Nigeria’s grid improvement has adopted a plant-by-plant evacuation technique, the place every generator is linked to the grid by way of a devoted transmission line. A fault on a single evacuation line can shut down a complete plant.

Reasonably than serving a single generator, the hall mannequin would permit a number of energy producers, gasoline, hydro, photo voltaic or wind, to hook up with the identical community.

This strategy mirrors transmission methods adopted in different nations to speed up electrical energy growth and enhance grid flexibility.

Fixing bottlenecks with out constructing new crops

A key argument behind the GAMCO idea is financial. Constructing a brand new 1,600MW energy plant might value greater than $3.3bn and take 5 to seven years to finish. Optimising current crops, against this, might ship equal capability in below three years at a considerably decrease value.

The federal government additionally notes that international provide shortages in gasoline generators imply new crops can’t be delivered rapidly, even when funding had been out there.

Nigeria, nevertheless, already owns the generators put in in NIPP crops. The problem lies in enhancing their availability, making certain a dependable gasoline provide, and strengthening evacuation infrastructure.

Partnership with current establishments

The proposed firm is not going to exchange current energy sector establishments. The Niger Delta Energy Holding Firm will stay the proprietor of the NIPP crops, whereas the Transmission Firm of Nigeria will retain accountability for the nationwide grid.

GAMCO will, nevertheless, function by way of contractual partnerships with each establishments.

NDPHC is predicted to grant GAMCO concession and lease preparations for the chosen energy crops, enabling operational enhancements and business restructuring.

TCN, however, will grant GAMCO the best to develop and function the brand new transmission hall, with the belongings finally strengthening TCN’s grid capability.

The association permits the brand new firm to mobilise personal financing for infrastructure tasks that current public establishments typically battle to fund.

Financing with out sovereign debt

One of many central design options of the initiative is its financing construction. Reasonably than counting on direct authorities borrowing, GAMCO is meant to boost funding by way of venture finance backed by ring-fenced income streams.

Reasonably than relying totally on authorities funding or sovereign borrowing, the initiative goals to draw home and worldwide personal funding. Initiatives might be structured so that every asset, whether or not an influence plant improve or a transmission line, has its personal devoted income streams.

These “ring-fenced” constructions are designed to make tasks bankable, permitting buyers to fund them based mostly on projected money flows moderately than authorities ensures.

The Renewed Hope Infrastructure Growth Fund’s energy staff is predicted to supervise the institutionalisation and governance framework of the corporate.

Potential template for nationwide growth

The federal government views the pilot section as a proof of idea. If profitable, the mannequin may very well be prolonged to different underperforming crops and transmission corridors throughout the nation.

The purpose is to create a scalable framework able to unlocking dormant electrical energy belongings nationwide whereas strengthening Nigeria’s energy infrastructure with out putting further stress on public funds.

Finally, the success of GAMCO will rely not solely on technical execution but in addition on regulatory coordination, business self-discipline and investor confidence.

By rising out there grid energy, initiatives akin to GAMCO might doubtlessly decrease power prices for industries, enhance productiveness for producers, assist small and medium enterprises and scale back reliance on self-generated energy.

For households, improved electrical energy reliability might additionally translate into higher residing requirements and decreased power bills.

What comes subsequent?

Some power specialists have, nevertheless, cautioned the Federal Authorities towards the proliferation of companies within the energy sector. A report quoted the Govt Director of PowerUp Nigeria, a shopper advocacy group, Adetayo Adegbemle, as saying the creation of GAMCO creates extra questions than solutions in resolving the state of affairs within the nation.

He requested, “What is occurring with the Presidential Energy Initiative/FGNPowerCo? Is there not an overlap of capabilities with GAMCO? What’s the finish concept of this GAMCO? How does GAMCO interface with different stakeholders? If GAMCO is headed by the Chief of Employees, is it a board-like position, and can there be a working workplace? How does GAMCO interface with the Ministry of Energy? What powers precisely does this constituted committee maintain? Is it advisory or government? The place does the Nigeria Built-in Power Plan by EA2023 are available in all of those?”

A member of the committee and a Professor of power legislation on the College of Regulation, University of Lagos, Yemi Oke, nevertheless, believed GAMCO occupies a special house, including that the proposed firm is not going to displace any current establishment.

Chatting with The PidomNigeria on what GAMCO is designed to unravel, which current establishments have been unable to deal with, he stated, “GAMCO exists to unravel each the technology and transmission issues.

“Nigeria has energy crops which might be constructed however not producing at full capability and transmission corridors which might be wanted however not but funded. GAMCO exists to unravel each issues on the similar time. NDPHC and TCN every have clearly outlined mandates: NDPHC owns and manages technology belongings, and TCN operates and maintains the nationwide grid. GAMCO occupies a special house fully. It’s a business structuring and capital mobilisation car that enhances what these establishments do. It brings personal capital, agency gasoline contracts, creditworthy off-takers, and worldwide infrastructure buyers into the sector. No current establishment was designed to do all of these items concurrently, as a result of that was by no means its mandate. GAMCO fills that hole with out duplicating or displacing any current establishment.”

On why the federal government determined to prioritise recovering stranded capability as an alternative of investing in new energy crops, Prof. Oke stated, “Recovering stranded capability is quicker, cheaper, and makes extra financial sense. There’s a well-known precept within the power trade: the most cost effective megawatt is the one you will have already constructed. Nigeria already has 1,775MW of put in capability throughout three crops that may be restored to full operation. New energy crops value as much as $2,350 per kilowatt to construct, take 5 to seven years to finish, and face a world turbine scarcity the place demand exceeds manufacturing capability. Against this, rehabilitating current crops and securing agency gasoline can ship recovered megawatts inside 24 months at a considerably decrease value. To place it merely: it doesn’t make sense to construct a brand new home when you will have a wonderfully good one which simply wants the roof fastened, the gasoline linked, and a tenant signed up.”

Talking additional, Oke stated the goal is to boost the provision of the three energy crops from their present ranges to 90 per cent or above throughout the proposed timeline.

“This isn’t speculative. The generators at Omotosho, Olorunsogo, and Ihovbor are sound belongings that require focused funding, a agency gasoline provide, and contracted offtake to achieve their full potential. These are business and contractual challenges, not elementary engineering issues. GAMCO addresses all three concurrently: capital for upgrades and upkeep, agency take-or-pay gasoline contracts with upstream producers, and bilateral energy buy agreements with creditworthy industrial prospects who pay on time. International precedents verify that is achievable. South Africa’s IPP Workplace, with simply 30 employees, mobilised $14bn in personal capital. India’s transmission programme delivered over 40,000 circuit-kilometres by way of personal builders. GAMCO follows the identical confirmed mannequin.”

Talking on the Benin-Lagos hall as the start line for the pilot venture, Prof. Oke described the hall because the business and industrial heartland of Nigeria, which carries almost 1 / 4 of the nation’s complete electrical energy demand, accounts for 27.4 per cent of Nigeria’s non-oil GDP, and is dwelling to twenty-eight.4 per cent of the nation’s manufacturing output.

Based on him, the demand alongside the hall is projected to achieve 6,133 megawatts by 2030 and is rising at 11.5 per cent per 12 months.

“The three NIPP crops, Omotosho in Ondo, Olorunsogo in Ogun, and Ihovbor in Edo, all sit straight on this hall. Beginning right here delivers the very best financial influence within the shortest time. Nevertheless, GAMCO shouldn’t be restricted to this hall. The mannequin is designed to increase to the South East to South-South hall, which has almost 6,735 MW of put in technology capability throughout the gas-rich Niger Delta, and to the northern hall, which might catalyse Nigeria’s intensive hydropower and photo voltaic sources,” he stated.

Talking additional on how GAMCO will change the best way electrical energy is generated and transmitted in Nigeria, Prof. Oke stated GAMCO will make investments capital to carry three NIPP crops to their full working potential, signal agency gasoline provide contracts so the crops have dependable gasoline, and negotiate energy buy agreements straight with giant industrial prospects.

He stated the event will create a commercially self-sustaining income stream for the crops, because it additionally plans to develop a brand new high-capacity transmission line alongside the pilot hall.

Based on Prof. Oke, GAMCO is not going to construct the road itself. It can, as an alternative, herald skilled worldwide transmission operators and infrastructure buyers to construct, personal, and function the road as a complement to the prevailing grid. TCN beneficial properties further hall capability that strengthens the nationwide community.

“The tip end result for Nigerians is simple; crops which might be at the moment underperforming will produce dependable electrical energy, and a brand new transmission line will carry that electrical energy to the houses and companies that want it most,” he stated.

Prof. Oke additionally spoke on three constraints, which he stated are solvable. Based on him, “There are three constraints, and none of them are unsolvable. First, the crops want focused funding in upkeep and element upgrades to revive turbine efficiency to design specs. Second, the crops want a agency, managed gasoline provide. Like most gas-fired crops in Nigeria, they’ve traditionally relied on spot gasoline procurement, which doesn’t assist constant operations. Third, the crops want creditworthy off-takers who’re contractually dedicated to paying for the electrical energy they eat.

“GAMCO solves all three in a single built-in programme: personal capital for the plant upgrades, agency take-or-pay gasoline contracts with upstream producers, and bilateral agreements with creditworthy industrial consumers. GAMCO offers the business structuring and capital that flip these belongings into revenue-generating infrastructure for the advantage of all three tiers of presidency.”

Talking on financing, Prof. Oke stated the federal government is focusing on home banks, pension funds, and even worldwide infrastructure buyers, relying on the stage.

“For the transmission programme, GAMCO is focusing on three classes of co-equity sponsors: worldwide transmission operators akin to Energy Grid Company of India, Sterlite Energy, and Adani Power Options; infrastructure buyers akin to Africa50, the Worldwide Finance Company, and Meridiam, who present long-term affected person capital; and improvement finance companions akin to IFC InfraVentures and British Worldwide Funding’s Gridworks platform, who carry concessional finance. Nigerian institutional buyers, together with pension funds and insurance coverage corporations, might take part by way of the debt devices,” he stated.

Additionally talking, the CEO of Cabtree, an power consultancy agency, Mr Olabode Sowunmi, famous that the actual elementary problems with the facility sector stemmed from the inefficiencies among the many technology corporations, the transmission corporations and the distribution corporations, with everyone blaming each other and all of them gaming the nation.

Sowunmi, who can be the chairman of the Power Transition Research Group of the Nigerian Gasoline Affiliation, lamented that the technology, distribution and transmission corporations didn’t put money into infrastructure through the years, including that it was so unhealthy that the infrastructure from when the previous Nationwide Electrical Energy Authority existed is even higher than what it at the moment is.

The power skilled stated the federal government prioritising recovering stranded capability as an alternative of investing instantly in new energy crops is about what’s cheaper and what will be efficient.

“So, actually and really, anyone can select whichever choice they need by way of whether or not the federal government chooses to go after stranded belongings or not. However you wish to have a look at the general view of the trade or the sector, what’s sensible and all that, after which select. That may be a judgement name, actually. So, if you happen to had been sitting there in a authorities place, you may or may not select a special factor. However everyone desires to have a look at what the problem is after which select what they consider is finest for the nation, which I consider is what the federal government has carried out,” he stated.

Sowunmi, nevertheless, believed that unlocking the 1,600MW from the chosen NIPP crops is a tall order, primarily due to the challenges concerned by way of infrastructure.

“It’s not inconceivable, however it’s a tall order due to the monetary necessities to evacuate energy, after which it’s going to be depending on whether or not that energy goes to the nationwide grid or not. So there are a number of elements, however it isn’t inconceivable.

“Reaching that will depend on how a lot assist they’ve, how a lot time they’ve and the way a lot cash is made out there to them. These are the issues that can decide whether or not the factor will actually work or not,” Sowunmi stated.

Talking on the capability of Omotosho and others on the Benin-Lagos hall, Sowunmi stated, “For Omotosho and others, I’m talking truthfully from my understanding: the problem is extra in regards to the capability of the worth chain. For a few of them, they’re truly in a position to function at full capability after correct servicing and upkeep, however the electrical energy they generate can’t be evacuated. In different phrases, the transmission and distribution corporations can’t take or utilise the facility. And if they can not use it, what precisely are they transmitting?

“So it’s higher that they don’t produce in any respect, as a result of even when they generate the electrical energy and transmit it, the distribution corporations might not be capable to take it both. This may very well be as a result of distribution capability is proscribed or as a result of the customers they provide can’t pay. What this implies is that there may very well be a grid failure. Grid failure doesn’t happen solely when there’s excessively excessive voltage that forces the system to close down to guard itself from harm or collapse,” he added.

Sowunmi argued that Nigerian banks could also be unable to finance the initiative resulting from excessive rates of interest, noting that such charges are unsuitable for funding infrastructure tasks of that scale.

“I might not know the type of buyers the federal government is focusing on, however undoubtedly not Nigerian banks. Nigerian banks borrow cash at about 30 per cent, and you can not develop infrastructure with that type of rate of interest. So that they should search for affected person capital—buyers who’re keen to lend at round 5 per cent over 30 years. These are the sorts of choices to contemplate. The right way to safe such financing could also be troublesome, however that’s what must be carried out. It actually can’t be achieved with the type of rates of interest we at the moment have within the nation,” he concluded.