In June 2023 Nigeria replaced the law that had governed its electricity sector for two decades. The Electricity Act 2023 was not a minor amendment but a structural reordering of who is allowed to generate, transmit and distribute power in the country. Its full effects will take years to unfold, but its direction is already clear: away from a single national system and towards many decentralised ones.
The most consequential change is the devolution of power to the states. The Act, following a constitutional amendment, allows each state to make its own laws for electricity generation, transmission and distribution within its borders. In a federation as large and varied as Nigeria, this turns a single national market into the prospect of dozens of state markets, each able to license operators and design rules suited to local demand.
A clearer path for private and embedded supply
For private operators the Act is an invitation. It consolidates and clarifies the rules for independent power production, embedded generation and mini-grids, and it confirms that businesses can generate and sell power outside the traditional grid relationship. Provisions encouraging renewable energy and giving large consumers more freedom in how they buy electricity all point the same way, towards a market with more participants and more routes to supply than the old single-buyer model allowed.
None of this is automatic. States must build the institutions to regulate their new powers, and investors will move first to the states that create stable and creditworthy frameworks. But the legal ceiling that once capped private and distributed power has been lifted. The question has shifted from whether the rules permit a decentralised power sector to how quickly operators and states can build one.
Why this matters
The law now matches the model
Nova was built around distributed, embedded and privately operated generation before the Electricity Act made that the clear direction of national policy. With the legal framework now pointing towards state-level markets and power sold next to demand, an operator already running embedded plants and serving commercial and infrastructure customers is positioned to move as the new markets open.