In a country grappling with power woes, Kano Electricity Distribution Company (Kano DisCo) has emerged as a beacon of hope, achieving a remarkable 50% growth in industrial power consumption during 2025. This success story stands out in Nigeria's troubled power sector, where manufacturers have traditionally turned to costly self-generation due to unreliable grid electricity.
Kano DisCo's managing director, Abubakar Jimeta, emphasizes the company's focus on manufacturers, stating that they have advanced discussions with several key players and are actively enrolling more into their specialized program. The results speak for themselves, with industrial offtake soaring from 43.33 gigawatt-hours in January to a whopping 62.14 GWh by December, totaling approximately 569 GWh across eleven months.
But here's where it gets controversial... While Kano DisCo thrives, the rest of Nigeria's power sector struggles. Industrial customers across the country cite power reliability as a major challenge, leading to a vicious cycle of underinvestment and poor service. So, what sets Kano DisCo apart?
The distributor attributes its success to a multi-faceted strategy, including infrastructure upgrades funded by its parent company, Future Energy Africa. These investments have allowed the network to handle increased industrial loads while maintaining service reliability, a feat that has eluded many Nigerian utilities.
Kano DisCo has established dedicated 33-kilovolt feeders for major manufacturers like Dangote, Flour Mills, and Coca-Cola, achieving an impressive 95% service compliance. This means that these industrial customers receive an average of 22 hours of daily supply, a level of reliability that surpasses much of Nigeria's grid performance.
Muhammad Dantata, the chief commercial officer, highlights the importance of consistent service delivery in winning the trust of manufacturers. Jamilu Ahmad, who heads industrial operations, believes that the month-on-month consumption increases are a testament to the growing confidence manufacturers have in Kano DisCo's capabilities.
And this is the part most people miss... One of the most innovative aspects of Kano DisCo's strategy is its pursuit of bilateral power purchase agreements with hydroelectric producers. By cutting out some traditional supply chain inefficiencies, the company has secured deals with facilities like the DadinKowa Hydro Power Plant, reducing costs for industrial customers. This approach allows distribution companies to contract directly with generators, potentially offering more competitive rates compared to self-generation.
Since May 2024, Kano DisCo has operated a Special Tariff Program for Bulk Consumers and Manufacturers, maintaining competitive pricing despite financial pressures in the sector. The company's growth trajectory looks set to continue, with advanced negotiations to connect Lee Group to the grid. Sources indicate that an agreement with this manufacturer, which operates between 40 and 50 megawatts of capacity, is in its final stages, marking a significant milestone for Kano DisCo's industrial expansion.
The company is also finalizing a new program directly targeting manufacturers, building on the success of its collaboration with the Manufacturers Association of Nigeria last year. This targeted industrial engagement has proven to be a game-changer, increasing offtake and providing a solid foundation for the current strategy.
Kano DisCo's success extends beyond its franchise area in northern Nigeria. The country's manufacturing sector has long identified unreliable electricity as a major hurdle to competitiveness and growth. Estimates suggest that factories spend up to 40% of their production costs on self-generated power, putting them at a disadvantage against imports and limiting industrial expansion.
If other distribution companies adopt Kano DisCo's model, it could help address some of the structural challenges in Nigerian manufacturing. By attracting industrial growth through improved services and higher-value industrial sales, utility financial viability could be enhanced. Industrial customers offer more reliable payments and higher consumption volumes, making them attractive targets, but they also require superior service levels.
This approach also highlights the role of private investment in solving power sector challenges. Future Energy Africa's infrastructure financing has enabled service improvements, attracting industrial growth and potentially creating a virtuous cycle of investment returns.
However, it's important to note that Kano DisCo operates in a relatively favorable environment with established manufacturers. Replicating success in regions with less industrial development or different grid constraints may be more challenging. Additionally, the bilateral power arrangements rely on willing generators with available capacity, which is not uniformly available across Nigeria's power system.
Despite Kano DisCo's gains, Nigeria's power sector continues to face systemic challenges, including gas supply constraints, transmission bottlenecks, and tariff disputes. The federal government's efforts to reform the sector through privatization and updated regulatory frameworks have been met with difficulties, leaving most distribution companies struggling with losses and debt.
Kano DisCo's industrial strategy demonstrates that focused efforts on specific customer segments, backed by infrastructure investment and innovative procurement, can drive growth even in a challenging environment. It remains to be seen if other distribution companies can follow suit and help Nigeria's power sector overcome its systemic challenges.
