September 4, 2025/CSL Research
The Bureau of Public Enterprises (BPE) has announced plans to list one electricity generation company (GenCo) and two distribution companies (DisCos) on the Nigerian Exchange (NGX) through initial public offerings (IPOs). Under the arrangement, part of the Federal Government’s 40% stake and the States’ 30% residual shareholdings in selected power companies will be offered to the public.
The initiative aims to broaden ownership, strengthen corporate governance, and raise capital for critical network upgrades. It also builds on BPE’s established track record of driving reforms across key sectors of the Nigerian economy.
In the telecommunications sector, the BPE played a pivotal role in the privatisation of the state-owned NITEL/MTEL, which opened the market to competition and enhanced service delivery. In maritime transport, the agency successfully implemented the concession of Nigeria’s seaports, transferring terminal operations to private concessionaires through long-term leases. The pension industry has also benefitted from BPE-led reforms, most notably through the Pension Reform Act of 2004, which introduced a contributory pension scheme and established the National Pension Commission (PenCom). This reform has created one of the largest pools of long-term capital in Nigeria’s financial market, significantly supporting investment in equities and bonds.
The planned listings are expected to deliver wide-ranging benefits. For the Nigerian stock market, new listings from a strategic sector would deepen activity and attract both institutional and retail investors. For the power sector, equity financing would provide much-needed capital for metering, loss reduction, feeder rehabilitation, and generation capacity upgrades. Enhanced regulatory oversight would also strengthen corporate governance and operational transparency. For the private sector, the transactions offer a clear entry and exit pathway, lowering perceived policy risks and encouraging greater private investment. For the
government, partial divestments would generate immediate proceeds, ensure recurring tax and dividend revenues, and reduce fiscal exposure to loss-making utilities.
Several challenges could delay or weaken the planned listings. Many DisCos continue to grapple with weak balance sheets, high technical and commercial losses, and tariff under-recovery, all of which complicate valuation and discourage investor interest. Governance gaps, legacy debts, labour disputes, and incomplete audited accounts also risk non-compliance with Nigerian Exchange (NGX) and Securities and Exchange Commission (SEC) standards. Regulatory uncertainty around tariff adjustments and market liquidity further dampens confidence. To overcome these hurdles, BPE and regulators must prioritise liability restructuring, stronger governance frameworks, and transparent accounting practices.
Securing institutional investors as cornerstone shareholders would help anchor demand, while retail participation should be encouraged through clear commitments on the use of proceeds. A phased approach, beginning with smaller stake sales could also build confidence ahead of larger divestments.
Click here to download full report: CSL Nigeria Daily – 04 September 2025 – Power Sector.pdf
