Oyo Opens Power Sector to Investors, Unveils New Electricity Market Framework.
By Adewale Owoade.
The Oyo State Government has commenced a major overhaul of its electricity sector, opening up the market to private investors as part of a broader strategy to improve power supply, drive economic growth, and enhance service delivery.
The Commissioner for Energy and Natural Resources, Prof. Dawud Sangodoyin, made this known during a press conference at the Governor’s Office in Ibadan.
He said the reform, anchored on a new regulatory framework, would allow multiple operators to participate across the electricity value chain, including generation, transmission, and distribution.
According to him, the state has already created an enabling environment for investment by segmenting its electricity market into industrial, institutional, residential, and underserved clusters to attract targeted solutions.
“We are deliberately opening up the electricity space to credible investors. Our framework allows them to study our electricity priority plan, conduct feasibility assessments, and deploy tailored solutions,” Sangodoyin said.
He disclosed that more than 30 potential investors had already been engaged, with at least one showing interest in hydroelectric power generation.
To strengthen oversight, the commissioner noted that the Oyo State Electricity Regulatory Commission had been empowered as the primary authority to license operators and regulate activities within the sector.
“There is now a functional local regulator responsible for licensing, tariffs, and service delivery. Any operator in the electricity space within the state must comply with the commission’s guidelines,” he said.
He added that the commission had introduced a complaint resolution mechanism, promising to address issues raised by residents and businesses within 72 hours.
Despite the focus on market liberalisation, Sangodoyin acknowledged the significant gap in electricity supply, revealing that the state currently generates between 151 and 182 megawatts, far below the estimated 520 megawatts required for optimal performance.
To address this, he said the government had initiated short- and medium-term interventions, including a 12-megawatt independent gas-powered project expected to come on stream within two months.
He explained that the project would increase available capacity to about 194 megawatts in the short term, while longer-term plans aim to raise supply to nearly 300 megawatts by 2027.
As part of infrastructure improvements, the independent power project will prioritise electricity supply to critical government facilities in Ibadan, including the State Secretariat, Government House, and the judiciary, as well as street lighting networks.
“We are starting with critical infrastructure to improve efficiency in governance, while also exploring ways to extend benefits to surrounding communities through energy audits,” he said.
Sangodoyin further disclosed that the state had begun integrating renewable energy into its mix, with pilot solar-powered street lighting projects already showing promising results.
On policy alignment, he assured that the state’s electricity reforms were consistent with existing national laws, including the Electricity Act and the Petroleum Industry Act.
“We are working in harmony with federal regulations to ensure that our reforms deliver mutual benefits without conflict,” he said.
The commissioner also emphasised the need to avoid monopolies in the sector, noting that competition among multiple operators would lead to improved service delivery and more competitive pricing.
“Encouraging competition is key. It ensures efficiency, innovation, and better outcomes for consumers,” he added.
While acknowledging transitional challenges, particularly with existing distribution companies, Sangodoyin expressed optimism that ongoing stakeholder engagements would ensure a smooth reform process.
He reiterated the government’s commitment to building a sustainable electricity market that supports businesses, reduces operational costs, and improves the quality of life for residents.