Tinubu Administration Unveils $2.5 Billion Strategy to Stabilise Nigeria’s Power Supply
- Nigeria plans to raise $2.5 billion to settle power sector debts and fund major upgrades to electricity transmission and distribution
- The fund from the program is expected to stabilise supply for about 12 million customers while unlocking 4,484 megawatts of capacity
- Officials say the initiative will reset the electricity market by improving revenue collection, modernising the grid and other benefits
Legit.ng journalist Victor Enengedi has over a decade's experience covering energy, MSMEs, technology, banking and the economy.
The Federal Government of Nigeria has unveiled a bold plan to mobilise $2.5 billion (about N4 trillion) to address the country’s deep-rooted electricity challenges.
The proposed funding is intended to clear long-standing payment arrears owed to power sector operators and to finance key upgrades across the transmission and distribution value chain.
Source: UGC
Olu Verheijen, Special Adviser to President Bola Tinubu on Energy, revealed in an interview that the government has already issued the first portion of the debt, N501 billion, earlier this month.
The offer, priced at a 17% yield, was fully taken up by investors. According to her, subsequent issuances will be rolled out either quarterly or biannually, depending on prevailing market conditions, as reported by Bloomberg.
Describing the initiative as a turning point for the sector, Verheijen said the program is designed to fundamentally restructure Nigeria’s electricity market.
She explained that part of the funding will support distribution companies in boosting revenue collection, particularly by accelerating the deployment of electricity meters to address the widespread metering shortfall.
In addition, a portion of the capital will be directed toward modernising the country’s transmission infrastructure.
Nigeria’s transmission grid currently has the capacity to evacuate only about a quarter of the estimated 13,000 megawatts available from power generation, while only around 50% of customers connected to the grid are properly metered.
In an emailed statement, the government said settling the outstanding debts is expected to improve electricity supply for nearly 12 million registered customers and unlock an additional 4,484 megawatts of generation capacity.
Verheijen also noted that the government has begun shifting toward cost-reflective electricity pricing. She said the goal is to introduce a consumption-based tariff system that ensures consumers pay strictly for the power they use.
Nigeria’s electricity challenge
Nigeria’s power sector continues to struggle with chronic inefficiencies, marked by frequent grid failures, insufficient generation, and prolonged blackouts that disrupt everyday life and economic productivity.
Repeated nationwide grid collapses have weakened investor confidence and left households, businesses, and critical institutions without reliable electricity.
Industry analysts attribute the sector’s fragility to limited generation capacity, ageing and poorly maintained infrastructure, weak coordination between power producers and distributors, and systemic operational gaps.
Source: UGC
As a result, many Nigerians depend heavily on petrol and diesel generators, significantly increasing operating costs for businesses and placing financial strain on households.
Despite periodic reforms and minor improvements, the electricity grid remains unstable, highlighting the urgent need for sustained investment and comprehensive structural reform.
FG, World Bank roll out $500m intervention scheme
Meanwhile, Legit.ng earlier reported that the FG launched a $500 million intervention programme aimed at stabilising Nigeria’s struggling electricity distribution sector.
The programme, in partnership with the World Bank, aims to reduce ATC&C losses and close the 5.3 million metering gap by ending billing discrepancies in the country.
A major focus of DISREP is addressing Nigeria’s massive metering deficit as the government vowed to eliminate estimated billing and ensure free meter installation nationwide.
Source: Legit.ng
