Nigeria’s power sector has attracted over $2 billion in fresh investments following ongoing reforms by the Federal Government, which also claims to have reduced legacy liabilities to about N146 billion, signaling what it describes as early gains under President Bola Tinubu’s Renewed Hope Agenda.
The Minister of Power, Adebayo Adelabu, disclosed this in Abuja on Thursday during the inauguration of the new headquarters of the Nigeria Electricity Liability Management Company (NELMCO), describing the development as a major step in strengthening the sector’s financial and institutional framework.
According to Adelabu, reforms driven by policy overhaul, market liberalisation and institutional strengthening are gradually repositioning the electricity value chain for sustainability and increased private sector participation.
He noted that NELMCO has played a critical role in improving sector liquidity, cutting inherited liabilities from N2.303 trillion to N146.76 billion, while delivering over N700 billion in savings to the Federal Government through rigorous verification and reconciliation processes.
The agency, he added, also reduced disputed ground rent claims from N644 billion to N41.8 billion and achieved a 45 per cent drop in post-privatisation debts owed by Ministries, Departments and Agencies (MDAs) to electricity distribution companies.
Adelabu said these efforts, alongside broader reforms, have boosted investor confidence, leading to over $2 billion in new investments and a 70 per cent increase in sector revenue in 2024.
He attributed much of the progress to the Electricity Act 2023, which has decentralised the power sector and enabled subnational participation, with about 16 states already activating their electricity markets.
Despite these gains, concerns remain over the sector’s deep-rooted financial challenges, particularly the more than N6 trillion owed to key stakeholders, including gas suppliers and power generation companies.
Industry analysts warn that the persistent debt overhang—estimated at about N6.5 trillion—continues to threaten the sustainability of the sector, even as the government highlights improvements in liquidity and efficiency.
Operationally, the minister said generation capacity has risen from 13 gigawatts to 14 gigawatts, with a peak of 5,801.44 megawatts recorded, while efforts are ongoing to close the country’s metering gap through the Presidential Metering Initiative.
The initiative is backed by N700 billion mobilised through the Federation Account Allocation Committee and an additional $500 million World Bank facility, with procurement processes already underway.
Adelabu also revealed that Nigeria recently achieved synchronisation of its national grid with those of other ECOWAS countries after a successful four-hour uninterrupted test run, a development he said signals readiness for regional electricity trade.
He maintained that the reforms are aimed at building a transparent, commercially viable and sustainable power sector capable of supporting economic growth.
However, the government’s optimism contrasts with growing public frustration over persistent power outages across the country. In recent weeks, many Nigerians have complained of worsening electricity supply, with some distribution companies accused of prioritising revenue collection over service delivery.
Earlier, Adelabu apologised to Nigerians for the outages, attributing the disruptions to gas supply constraints and infrastructure challenges, particularly during the dry season when demand typically rises.
While he expressed confidence that supply would improve in the coming weeks, analysts insist that addressing the sector’s liquidity crisis, ensuring steady gas supply and sustaining policy consistency remain critical to achieving reliable electricity nationwide.
