•Releases national policy on power
Sector revenue grew 70% to N1.7tn in 2024
•Debts owed Gencos now N4tn, $2bn investment recorded last year, says Adelabu
•$32bn investment required in five years to achieve uninterrupted supply
•Govt mulls cost-reflective tariffs, says N700bn available for meters’ purchase
Emmanuel Addeh in Abuja
For the first time in decades, the federal government yesterday released a National Integrated Electricity Policy (NIEP) to drive the transformation of Nigeria’s power industry and ensure the return of over 60 per cent of manufacturing firms, which had exited the national grid.
At the event, where the Integrated Resource Plan (IRP) was also made public, in collaboration with the United Kingdom Nigeria Infrastructure Advisory Facility (UKNIAF), Minister of Power, Chief Adebayo Adelabu, stated that through the support of stakeholders and the execution of the Band ‘A’ policy, revenue generated from the power sector grew by 70 per cent, from N1.05 trillion to about N1.7 trillion in 2024.
Nigeria’s power sector has long been plagued by numerous challenges, creating a significant bottleneck to economic growth and industrialisation. Despite its vast energy resources, including abundant fossil fuels and renewable energy potential, the country struggles with unreliable electricity supply, leading to frequent blackouts and reliance on expensive alternative power sources, such as generators.
Many power plants, especially thermal stations, depend on gas, but the inadequate supply of this critical resource – caused by pipeline vandalism, non-payment issues, and regulatory bottlenecks – has often led to underperformance.
Besides, the Transmission Company of Nigeria (TCN), which oversees the national grid, has limited capacity to handle the generated power. In part, the grid infrastructure is generally outdated and fragile, frequently collapsing under stress and causing nationwide blackouts.
On the distribution side, power supply remains unreliable due to technical and commercial losses, estimated at over 40 per cent.
Despite these challenges, Adelabu stated at the event that Nigeria’s power supply grew by 35 per cent in the last one year. He reiterated that investment of $32.8 billion was needed in the sector between now and 2030 to enable the country achieve universal electricity access.
Out of that funding, Adelabu stated that $17 billion was expected from the public sector, while about $15.8 billion will be contributed by the private sector.
With rising debts to the Generation Companies (Gencos), the minister stated that after adopting cost-reflective tariff for a portion of the market, about 15 per cent in all, the “proof of concept” had generated results, reason the government was considering adjusting the prices for the rest of the power supply bands.
Adelabu explained, “This is the only way it can drive the kind of economic growth and national development that we had in mind at the beginning of this process. Today, more than 60 per cent of our manufacturing industry is completely off-grid.
“They engage in self-generation, not because they are in rural areas or they are in semi-urban areas, they are in locations where there is access to electricity. But how reliable is this access? We all know that there are a lot of sensitive manufacturing processes that cannot tolerate a one-minute dip in the electricity supply.
“Instead of taking such a risk by connecting to a grid that is not reliable, these industries would rather go for self-generation. I will note the impact of this. It is not cheap. It is very expensive.
“Therefore, our products or commodities being turned out from these factories can never be competitive. The only way we can allow this to contribute to economic growth, industrialisation, and national development is to ensure that there is reliability on grid supply, so that all these companies that are currently off-grid can go back to the grid, and this will reduce their cost of production, it will reduce inflation, and our locally manufactured goods can now compete with imported goods.”
Describing power supply as strategic driver sector for other critical sectors in the economy, the minister stated that President Bola Tinubu recognised that energy was not merely a commodity, but the backbone of economic growth, job creation, industrialisation, and national development.
He stressed that the new policy document had been submitted for the approval of the Federal Executive Council (FEC), explaining that by Monday next week, the document will be approved.
Adelabu stressed that last year alone, Nigeria was able to catalyse close to $2 billion into the power sector, cutting across the conventional electricity sector and the alternative renewable energy sub-sector.
He stated, “What we estimated is an investment of $32.8 billion into the sector between now and the year 2030 to enable us to achieve universal access, of which $17 billion is expected from the public sector, about $15.8 billion from the private sector. So catalysing just $2 billion in one year, we believe that we can do better.”
Adelabu argued that the main solution to the liquidity challenge in the power sector was ensuring that the sector was able to pay for itself and achieving 100 per cent commercialisation.
He said, “Two, three, four months after the introduction of band A, there was no noise again. Yes. So if we are not taking that step, probably we will still be at a point that will be worse than previous years.
“Because of that, we recorded a 70 per cent growth in sector revenue from N1.05 trillion in 2023 to about N1.7 trillion in 2024. That’s 70 per cent, just commercialising a tiny portion, 15 per cent of consumers, and you saw a growth of 70 per cent in sector revenue. This means that it can only get better as we are implementing more in this cost-effective tariff regime.
“In terms of output, in terms of capacity of the sector, there was about 35 per cent improvement in capacity, generation, transmission, and distribution. We still have high losses, 80 per cent losses, coming down gradually, but capacity has improved by 35 per cent, from an average of 4,200 MW in 2023 to 5,300 MW in 2024.”
The minister added that national grid generation increased by about 600MW in the last one year, stating that based on this, the country has been carrying out a lot of upgrading of the existing substations, and replacement of aging transformers, reactors, and more.
On metering, Adelabu stated that Nigeria had over six million customers that had no meters, describing it as a big discouragement for cost-reflective tariffs.
He said, “I can tell you that we now have about N700 billion reserved for these projects. The procurement process has started, and I can tell you, before the end of the first half of this year, we’ll be having nothing less than three million new meters that will come into the country.”
Adelabu said the Gencos were currently owed over N2 trillion, with outstanding unpaid subsidies for 2024 alone amounting N2 trillion.
He stated, “How do you expect to pay for gas to maintain their turbines and other infrastructure, to pay for even the staff, if a total of N4 trillion is being owed to them?
“So we believe that the government cannot afford to continue to fund the level of subsidy that our consumption pattern is throwing up, because we have seen increasing consumption of electricity. As consumption increases, government subsidies also increase.”
In his remarks, Permanent Secretary in the ministry, Mahmuda Mamman, stated that NIEP represented a comprehensive framework designed to guide the country towards universal electrification, inclusivity, and sustainability.
“As we embark on the implementation phase, I urge all stakeholders – government agencies, private investors, financiers, and development partners – to work together to translate these plans into action.”
