Inside GAMCO, Nigeria’s plan to revive idle power plants into electricity

Nigeria is turning to an unconventional strategy to ease its chronic electricity shortages by extracting more power from plants that already exist but operate far below capacity. Modestus Anaesoronye reports on the new federal government initiative and what this holds for the country.

Under a proposal by President Bola Ahmed Tinubu, the federal government plans to establish a new vehicle, Grid Asset Management Company Limited (GAMCO), designed to revive idle generation assets, strengthen transmission infrastructure and attract private capital into the electricity sector.

“Officials say the project would also become Nigeria’s first privately financed independent power transmission line, creating open-access infrastructure that future gas, solar or hydro generators could utilise.”

Government officials say the initiative could restore as much as 1,600 megawatts of additional electricity within two years, a potentially significant boost for a national grid that has struggled for decades to deliver reliable power to Africa’s most populous nation.

According to the presidency, the strategy focuses on optimising existing infrastructure, mobilising private investment and introducing disciplined asset management to improve electricity reliability and strengthen Nigeria’s economic competitiveness.

Nigeria’s power sector has long been defined by a structural paradox: billions of dollars have been invested in power plants that remain significantly underutilised due to weak gas supply, poor maintenance and limited transmission capacity. Although the country has installed generation capacity exceeding 13,000 megawatts, actual daily output typically falls far below that level, forcing households and businesses to depend heavily on diesel generators.

GAMCO, currently under review by an inter-ministerial committee, is intended to close that gap by transforming stranded public power assets into bankable infrastructure projects capable of attracting private finance. The company will be wholly owned by the federal government, with shares held by the Ministry of Finance Inc., but structured as a commercially run entity rather than a traditional government agency. Its mandate is focused but ambitious: identify underperforming government-owned power assets, rehabilitate them, and package them into revenue-generating projects that can attract lenders and investors.

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In its first phase, GAMCO’s strategy will concentrate on one of the most critical sections of Nigeria’s electricity network, the Benin–Lagos transmission corridor, which supplies electricity to Lagos and neighbouring Ogun State, the country’s industrial hub. The pilot programme targets three gas-fired plants developed under the National Integrated Power Project – the Omotosho Power Plant, Olorunsogo Power Plant, and Ihovbor Power Plant.

Together, the plants have an installed capacity of roughly 1,775 MW but currently operate far below their potential due to a combination of operational and commercial constraints.

Officials believe that by securing reliable gas supply contracts, bringing in experienced operations and maintenance partners, and restructuring power purchase agreements with credible buyers, the plants’ availability could be raised toward international benchmarks. At 90 percent availability, planners estimate the facilities could generate around 38,400 megawatt-hours per day, equivalent to roughly 38 percent of Nigeria’s average daily generation in late 2025.

Beyond rehabilitating generation capacity, the GAMCO plan also targets one of the grid’s most persistent constraints: transmission bottlenecks.

The proposal includes building a new high-capacity double-circuit transmission line along the Benin–Lagos corridor to improve power evacuation and reduce the risk of outages.

Nigeria’s transmission network has historically been designed around individual generators, with each plant connected by a single evacuation line to the grid. When those lines fail, entire plants are forced offline.

GAMCO proposes replacing that model with a shared high-voltage transmission corridor capable of carrying electricity from multiple generators, an approach widely used in electricity markets ranging from Texas to India.

Officials say the project would also become Nigeria’s first privately financed independent power transmission line, creating open-access infrastructure that future gas, solar or hydro generators could utilise.

Government officials emphasise that GAMCO will not replace existing electricity institutions but will instead operate alongside them through contractual partnerships. Under the proposed structure, the Niger Delta Power Holding Company will retain ownership of the National Integrated Power Project plants, while the Transmission Company of Nigeria will remain the statutory operator of the national grid.

GAMCO’s role would be that of project developer and financing platform, responsible for arranging operations contracts, securing fuel supply, negotiating power purchase agreements and raising capital for transmission infrastructure.

The presidency says the strategy also reflects global realities in the energy sector. Building new gas-fired plants has become significantly more expensive, with turbine prices rising sharply and global manufacturing capacity struggling to keep up with demand. According to project documents, constructing a new 1,600MW power plant could cost more than $3 billion and take five to seven years to complete.

By contrast, rehabilitating existing plants and strengthening the transmission corridor could deliver a similar amount of power in less than three years and at a fraction of the cost.

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Another central pillar of the proposal is its financing structure. GAMCO is designed to mobilise domestic and international private capital through project-finance structures tied to specific assets and revenue streams, rather than relying primarily on sovereign borrowing. The federal government would provide initial seed capital through the Renewed Hope Infrastructure Development Fund, while most project funding would be raised against the expected cash flows of individual power assets.

If successful, officials say the Benin–Lagos pilot could become a template for wider restructuring of Nigeria’s electricity network, with similar corridor projects rolled out across other regions of the country. For businesses accustomed to erratic power supply and high generator costs, even modest improvements in grid reliability could deliver significant economic benefits.

The real test, however, will be execution.

Nigeria’s power sector has undergone several waves of reform over the past two decades, many of which promised increased private investment and improved performance but ultimately produced only incremental progress. GAMCO’s architects argue that this initiative is different because of its narrow focus, not building new plants or restructuring the entire sector, but unlocking the value of infrastructure the country already owns.

As the planning document puts it, Nigeria’s core challenge is not a shortage of turbines; it is a shortage of systems capable of making them work.