Background

The Nigerian Electricity Supply Industry (“NESI”) remains one of the country’s most extensively regulated and often restructured sectors, yet its operational performance continues to fall short of demand. Despite the gradual increase in the installed generation capacity overtime, and successive reforms, most notably the 2013 partial privatisation and unbundling of the NESI into three operational segments of generation, transmission and distribution, the NESI continues to grapple with longstanding structural and operational challenges, particularly in relation to the evacuation and transmission of generated power.

Due to the failure of the national grid to expand or modernise at a pace commensurate to the generation capacity in Nigeria, Nigeria has consistently experienced constraints in transmitting generated electricity to end users, giving rise to inefficiencies, stranded generation capacity, and in some instances, system instability. These constraints are most visibly reflected in recurring grid disturbances and system collapses, with outages estimated to cost Nigeria around $1billion annually.

In practical terms, even where the generation segment is available, the national grid does not have the capacity to effectively and reliably evacuate and distribute the generated power. The challenge between generation and transmission remains one of the most significant impediments to the effective functioning of the NESI.

Against this backdrop, the Federal Executive Council has approved the incorporation of the Grid Asset Management Company Limited (“GAMCO”) as a Federal Government owned commercially run company created to unlock stranded generation capacity, rehabilitate and manage underperforming public power assets and address transmission bottlenecks by introducing a dedicated platform for the management, optimisation, and potential expansion of grid assets. GAMCO is an acknowledgement by the Federal Government that improving generation alone is insufficient without a corresponding enhancement of transmission infrastructure and system management. It also signals the need for more commercially oriented and structured approach to infrastructure development within NESI.

The GAMCO Framework

Given GAMCO’s mandate to unlock stranded generation, strengthen transmission evacuation infrastructure, and support improvements in grid management and control, the legal form and governance structure, although yet to be finalized, will be critical to the success of GAMCO.  

GAMCO, when fully operational, is expected to begin with its pilot phase which aims to recover stranded capacity from three National Integrated Power Project (“NIPP”) Plants – the Omotosho Power Plant (513 MW), the Olorunsogo Power Plant (754 MW), and the Ihovbor Power Plant (508 MW). The pilot phase will aim to recover at least 1,600 MW within 18 – 24 months, alongside the development of a new 330kV double-circuit transmission line along the Benin-Lagos corridor.

In order to achieve its objectives in the pilot phase, GAMCO is expected to interface with existing institutions in the NESI, including the Niger Delta Power Holding Company (“NDPHC”) as owner of the NIPP plants. It is expected that the NDPHC will grant GAMCO the concession and lease arrangements over the three NIPP plants. In addition, the Transmission Company of Nigeria (“TCN”) is expected to grant GAMCO the right to develop, finance, and operate the transmission infrastructure needed to evacuate electricity from the pilot plants into the national grid. This structure is significant because it suggests that GAMCO is not being conceived merely as another public entity, but as a commercial platform through which existing public assets may be repositioned into bankable projects.

The TCN currently retains responsibility for the ownership and operation of transmission infrastructure, while the Nigeria Independent System Operator (“NISO”), established under the Electricity Act 2023, performs independent system operation functions, including dispatch, system balancing, and real-time grid management.

Within the proposed institutional framework, GAMCO is envisaged as an additional layer focused on asset-level management and infrastructure development, particularly the rehabilitation and facilitation of existing power generation and transmission assets, and the mobilisation of private capital into grid-related projects. In that sense, GAMCO is not intended to replace existing institutions such as the TCN, NISO, Distribution Companies (“DisCos”), or existing asset-holding structures such as the NDPHC, but to operate functionally and strategically to improve grid operations. It is aimed at improving the efficiency and reliability of grid operations by focusing on asset management and infrastructure development. Strategically, it represents an attempt to introduce a more commercially structured approach to transmission, potentially enabling greater private sector participation.

Since receiving Federal Executive Council approval on the 4^th of March 2026, an 11-member inter-ministerial committee tasked with designing GAMCO's operational and legal framework was inaugurated. The committee includes the Chief of Staff to the President as chair, ministers of Power, Works, Finance, Petroleum, Communications & Digital Economy, Science & Technology, and Aviation, as well as sector regulators and energy experts. Its mandate is to ensure that GAMCO is established with a clear statutory mandate, effective governance structure, and regulatory alignment with existing institutions.

Regulatory and Commercial Considerations

From a legal and regulatory perspective, this proposal must be understood within the framework of the Electricity Act 2023 and the evolving institutional architecture of the NESI. The key question is how its role will fit alongside the Nigerian Electricity Regulatory Commission (“NERC”), TCN, the NISO, and existing asset-holding structures. There is the real danger of role duplication, legal ambiguity and institutional overlap as GAMCO is introduced into the market. In particular, GAMCO’s mandate to “revamp grid assets” and “evacuate stranded power” overlaps with TCN’s statutory role. Any long-term success will require clarity on licensing, grid access, operational control, and the extent of GAMCO's rights over the relevant assets and transmission infrastructure.

From a commercial perspective, GAMCO's real significance lies in bankability. If properly structured, the model could combine asset rights, transmission development, improved operations and maintenance, fuel supply discipline, and a credible offtake or settlement pathway into a package capable of attracting private capital. However, establishing that bankability in practice requires more than structural ambition. Lenders and equity investors in infrastructure transactions typically look out for specific and demonstrable features. To attract private capital, the model must move beyond policy goals and offer a structure that lenders trust.

This requires a credible settlement pathway that protects investor returns. Currently, the Nigerian power sector suffers from a payment chain that is fundamentally broken, largely because DisCos fail to collect sufficient revenue. If GAMCO is exposed to this same dysfunction, it will fail to attract high-quality investment. Consequently, the framework must ensure that GAMCO’s revenue is properly insulated from these market failures.

Ultimately, GAMCO should be viewed not simply as a transmission intervention, but as an attempt to convert underperforming public power assets into projects capable of delivering reliable megawatts on commercially sustainable terms.

Institutional Overlap and Conflict

The most consequential risk arising from GAMCO’s establishment is the prospect of institutional conflict. Prior to its approval, the TCN underwent its most significant structural reform in over a decade: the unbundling of its functions into the NISO and the Transmission Service Provider (“TSP”) pursuant to the Electricity Act 2023. This carefully constructed separation of system operation from transmission asset ownership which was designed to eliminate conflicts of interest now faces a potentially disruptive variable in the form of GAMCO.

In its capacity as TSP, TCN is responsible for owning, operating, and expanding transmission infrastructure, ensuring the efficient wheeling of generated power, and developing the grid to evacuate available generation while reducing transmission losses. GAMCO’s proposed role to revamp grid assets and evacuate stranded power conflicts directly with these functions. The central question, therefore, is the extent to which GAMCO’s activities will coexist with, or encroach upon, TCN’s operations, particularly where both entities are involved in the development, financing, or operation of transmission infrastructure.

While the grant of rights by TCN to GAMCO to develop, finance, and operate greenfield transmission infrastructure may be structured contractually, such arrangements do not, in themselves, resolve questions of statutory roles or operational primacy in the event of conflict.

The risk of institutional conflict is not merely theoretical but arises from the current conception of GAMCO within an existing restructured transmission framework. GAMCO, as presently envisaged, introduces a layer that may conflict with the delineated functions. The work of the inter-ministerial committee to identify and resolve areas of overlap and inconsistency is not just a formality, but a necessary condition for long-term viability. 

Opportunities for Investors, Contractors, and Other Stakeholders

Notwithstanding the uncertainties surrounding its final structure, GAMCO presents potential opportunities for private sector participation, particularly if implemented through concession-based or other Public-Private Partnership (“PPP”) arrangements.

One of the primary opportunities lies in the development and financing of transmission infrastructure. If GAMCO is used as a platform to concession specific grid assets or projects, investors may be able to participate in the financing, construction, rehabilitation, and operation of generation facilities, transmission lines and related infrastructure through PPPs. Such arrangements would be structured to provide returns based on availability, performance, or regulated revenue streams, depending on the underlying commercial model adopted.

For contractors, GAMCO is expected to generate a pipeline of engineering, procurement, and construction opportunities associated with the expansion and upgrading of transmission assets and generation facilities. Given the scale of the infrastructure deficit within the transmission segment, there is potential for sustained project activity, particularly where GAMCO fulfils its mandate to undertake grid expansion and rehabilitation programmes.

The success of these opportunities will, however, depend on the clarity and robustness of the GAMCO framework, including the availability of bankable revenue models, the presence or absence of government support mechanisms, and the regulatory certainty surrounding asset ownership and operational rights.

A Lasting Solution or Another Reform?

The proposed incorporation of GAMCO represents a noteworthy development in Nigeria’s efforts to address the persistent challenges affecting the transmission segment of the NESI. By introducing a commercially focused and dedicated asset management and infrastructure platform, GAMCO attempts to attract private capital, fix existing bottlenecks, unlock stranded power and develop and/or expand grid assets.

A key question, however, is not whether GAMCO is conceptually attractive, but what would make it different from earlier reform efforts. If GAMCO is to succeed, it will require sustained legal, regulatory, commercial and operational discipline. In particular, clarity would be needed regarding the allocation of roles between existing institutions, the legal basis for GAMCO’s control or management of transmission assets, and the establishment of commercially viable and predictable revenue frameworks capable of supporting long-term investment. Equally important would be the extent to which the structure is able to attract and sustain private sector participation on bankable terms, without creating undue regulatory complexity or fragmentation within the transmission segment.

Ultimately, the success of GAMCO depends on whether it is able to translate policy intent into a coherent and enforceable framework that delivers measurable improvements in grid performance and reliability.