Nigeria's State Electricity Markets: How the Electricity Act 2023 Is Reshaping Power by 2026
Nigeria's power sector is no longer a single national market. States are standing up their own electricity regulators — and the first state-issued distribution licence has already been granted.
From a federal market to a multi-tier market
The Electricity Act 2023 was assented to on 8 June 2023, marking a decisive shift away from a centralised, federally‑dominated electricity market toward a more decentralised, multi‑tiered structure in which individual states can establish and regulate their own electricity markets.
State-level progress as at mid-2026
As at June 2026, a growing number of states — including Enugu, Ekiti, Ondo, Imo, Oyo, Edo, Kogi, Plateau, Ogun, Ebonyi, Taraba, Delta, Lagos, Nasarawa, Jigawa and Bayelsa — have enacted their own state electricity laws. Of these, several have formally notified the Nigerian Electricity Regulatory Commission (NERC) and are in active transition, with Enugu, Ekiti and Ondo reported as having fully taken charge of their own electricity markets.
State-by-state progress is moving quickly — confirm the current status for any state you operate in before assuming which regulator (state or NERC) has jurisdiction.
The first state-issued distribution licence
In March 2026, the Enugu State Electricity Regulatory Commission issued a 20‑year distribution licence to MainPower Electricity Distribution Limited — the first licence of its kind issued under a state electricity regime rather than the federal framework.
The national policy backdrop
Alongside the state‑level rollout, the Federal Executive Council approved the National Integrated Electricity Policy (NIEP) on 5 May 2025, setting a national policy framework intended to work alongside — rather than against — the new decentralised state markets.
What this means in practice
- Developers and distribution licensees now need to check which regulator has jurisdiction — state or NERC — depending on where their assets sit and whether that state has activated its own market.
- Licensing timelines, tariff methodology and contracting practices may start to diverge between states as more of them stand up independent regimes.
- Existing power purchase agreements (PPAs) and distribution contracts should be reviewed for how they handle a change in regulatory jurisdiction.
Action plan for energy businesses
- Identify whether each state you operate in has enacted, notified NERC of, or fully activated its own electricity market.
- Engage early with the relevant state electricity regulator, in addition to (or instead of) NERC, depending on that state's status.
- Review existing PPAs, distribution and EPC/O&M contracts for clauses that assume a purely federal regulatory framework.
- Watch for further state transitions and align internal compliance tracking to each state's specific timeline.
Quick FAQs
Does NERC still have any role?
Yes — NERC remains relevant nationally and in states that haven't activated their own markets, and states must notify NERC as part of their transition process.
Which states currently regulate their own electricity market in full?
As at mid-2026, Enugu, Ekiti and Ondo are reported as having fully taken charge of their own markets, with several other states at earlier stages of enactment or notification — confirm the latest status for your specific state.
Do existing licences automatically transfer to the new state regulators?
This depends on each state's transition arrangements — review the specific state law and any NERC guidance on transition before assuming continuity of an existing licence.
Need help?
This guide is for general information only and does not constitute legal advice — see our Disclaimer. For advice tailored to your business, get in touch.
Key Sources
- Electricity Act, 2023.
- Nigerian Electricity Regulatory Commission (NERC).
- Enugu State Electricity Regulatory Commission.
- National Integrated Electricity Policy (NIEP), approved by the Federal Executive Council, 5 May 2025.
Last updated: July 2026. Laws and enforcement practice in this area are moving quickly — please confirm current status with us before relying on any specific figure or deadline.