Kano Electricity Distribution Company (Kano DisCo) has achieved a 50 percent surge in industrial power consumption during 2025, bucking a national trend that has seen manufacturers across Nigeria increasingly turn away from grid electricity in favour of costly self-generation.
The northern distributor recorded industrial offtake rising from 43.33 gigawatt-hours in January to 62.14 GWh by December, reaching cumulative consumption of approximately 569 GWh across eleven months tracked.
The growth marks a rare success story in Nigeria’s troubled power sector, where unreliable supply has historically forced factories to rely on diesel generators that can triple electricity costs.
“Manufacturers are a key focus for the company,” said Abubakar Jimeta, managing director, Kano DisCo. “We have advanced discussions in place with several manufacturers, and we’re actively enrolling more into our specialised program.”
The performance stands in sharp contrast to conditions elsewhere in Africa’s largest economy, where industrial customers frequently cite power reliability as among their primary operational challenges. Many distribution companies continue struggling to attract and retain industrial loads, creating a vicious cycle of underinvestment and poor service.
Kano DisCo attributes its industrial growth to a multi-faceted strategy centred on infrastructure upgrades financed by its parent company, Future Energy Africa. The investments have enabled the network to handle increased industrial loads while maintaining service reliability that has historically eluded Nigerian utilities.
The distributor has established dedicated 33-kilovolt feeders for major manufacturers, including Dangote, Flour Mills, and Coca-Cola, achieving 95 percent service compliance with an average 22 hours of daily supply to maximum demand industrial customers. That reliability level exceeds typical grid performance across much of Nigeria, where supply can be sporadic even in major commercial centres.
Muhammad Dantata, chief commercial officer, Kano DisCo, emphasised that consistent service delivery has been crucial to winning manufacturer confidence.
“The growth reflects KEDCO’s commitment to supporting industrial development in its franchise area,” he said, noting the company has worked closely with industrial customers on both reliability and competitive tariffs.
Jamilu Ahmad, who heads industrial operations, said the month-on-month consumption increases demonstrate manufacturers’ growing trust in the utility’s capabilities.
Bilateral deals cut costs
In what may prove the strategy’s most innovative element, Kano DisCo is pursuing bilateral power purchase agreements with hydroelectric producers to reduce costs for industrial customers.
The company has secured deals with facilities including the DadinKowa Hydro Power Plant in Gombe State, bypassing some traditional supply chain inefficiencies that have kept Nigerian electricity prices high despite chronic shortages.
The bilateral approach reflects broader power sector reforms, allowing distribution companies to contract directly with generators, potentially offering industrial customers rates that compete more favourably with self-generation costs. For energy-intensive manufacturers, even modest tariff reductions can significantly impact competitiveness.
Since May 2024, Kano DisCo has operated a Special Tariff Program for Bulk Consumers and Manufacturers, maintaining competitive pricing despite financial pressures affecting the sector. Nigerian utilities have faced mounting challenges, including foreign exchange losses, insufficient cost-reflective tariffs, and collection difficulties.
The distributor’s growth trajectory may accelerate further with advanced negotiations to connect Lee Group to the grid. While awaiting official confirmation, sources indicate an agreement with the manufacturer, which operates between 40 and 50 megawatts of capacity, is in the final stages. The addition would represent a major milestone in Kano DisCo’s industrial expansion.
The company is also finalising a new program directly targeting manufacturers, building on last year’s successful initiative with the Manufacturers Association of Nigeria. That earlier collaboration demonstrated targeted industrial engagement could yield substantial offtake increases, providing the foundation for the current strategy.
Kano DisCo’s success carries significance beyond its franchise area in northern Nigeria. The country’s manufacturing sector has long identified unreliable electricity as a critical constraint on competitiveness and growth. The Nigerian Economic Summit Group has estimated that factories spend up to 40 percent of production costs on self-generated power, undermining competitiveness against imports and limiting industrial expansion.
If replicated across other distribution companies, Kano DisCo’s model could help address some structural challenges in Nigerian manufacturing while improving utility financial viability through higher-value industrial sales. Industrial customers typically offer more reliable payment and higher consumption volumes compared to residential users, making them attractive targets despite requiring superior service levels.
The approach may also demonstrate the private investment’s role in solving power sector challenges. Future Energy Africa’s infrastructure financing has enabled service improvements that attracted industrial growth, creating a potentially virtuous cycle of investment returns, funding further expansion.
However, Kano DisCos operates in a relatively favourable environment with established manufacturers in its franchise area. Replicating success in regions with less industrial development or different grid constraints may prove more challenging. The bilateral power arrangements also require willing generators with available capacity, not uniformly available across Nigeria’s power system.
Sector challenges persist
Despite KEDCO’s gains, Nigeria’s power sector continues facing systemic challenges, including gas supply constraints, transmission bottlenecks, and tariff disputes. Total grid-available generation frequently falls below 5,000 megawatts for a country of over 200 million people, leaving vast unmet demand.
The federal government has pursued sector reforms, including the privatisation of distribution companies and updated regulatory frameworks, but implementation has proven difficult amid economic pressures and political complications. Most distribution companies continue struggling with technical and commercial losses while wrestling with debt burdens.
Kano DisCo’s industrial strategy suggests that focused efforts on specific customer segments, backed by infrastructure investment and innovative procurement, can drive growth even within a challenging broader environment.
