Business
Nigeria’s Power Generation Stagnates At 4,500MW
Nigeria’s electricity generation has stagnated around an average of 4,500 megawatts. This is in spite of the country securing loans totalling over $3.23bn in about four years from international financial institutions.
Such global institutions include the World Bank, the African Development Bank, and the Japan International Cooperation Agency.
All of these institutions have supported Nigeria’s power sector with billions of dollars in loans, but many parts of Nigeria still suffer incessant blackouts.
These funds were approved to finance various projects to address the country’s electricity challenges and improve access to reliable power supply.
Power generation in the country has, however, persistently hovered around 4,500MW for a population of over 200 million people.
The daily power report obtained by The Tide’s source on Thursday, for instance, showed that peak generation reached 4,743MW as of 6 am on Thursday.
However, the average power generation in the past three years has remained at 4,500MW despite efforts by the government.
Since 2020, the World Bank has approved multiple loans to Nigeria’s power sector, focusing on sustainable energy solutions, distribution system upgrades, and overall sector reform.
The Sustainable Power and Irrigation for Nigeria Project, with a principal amount of $500m, was signed in September 2024 to enhance energy reliability and agricultural productivity.
In December 2023, the World Bank signed agreements for the Nigeria Distributed Access through Renewable Energy Scale-up Project, totalling $750m across three International Development Association credits.
This project is expected to expand renewable energy access and distributed electricity solutions.
In June 2023, the World Bank approved $1.5bn for the Power Sector Recovery Performance-Based Operation, which includes $301m already effective, $449m currently disbursing, and $750m from 2020, of which $715m has been disbursed.
This programme was designed to improve financial sustainability and operational efficiency within the power sector.
Also, the Nigeria Distribution Sector Recovery Programme, with $500m approved in February 2021, aims to support the capital and technical needs of electricity distribution companies.
On July 31, 2024, the African Development Bank Group approved a loan of $500m to the Federal Republic of Nigeria to help transform the country’s electricity infrastructure and improve access to cleaner energy sources.
According to a statement from the AfDB, this funding will finance the first phase of the Economic Governance and Energy Transition Support Programme, aimed at transforming the country’s electricity infrastructure and improving access to cleaner energy sources.
The statement also noted that the loan will help close the financing gap in the Federal Budget for the 2024/25 fiscal year, specifically supporting the implementation of Nigeria’s new Electricity Act and the Nigeria Energy Transition Plan.
These initiatives are designed to decentralise the electricity supply industry and attract investments from subnational governments and the private sector.
In September 2022, the Federal Government said it would partner with the Japan International Cooperation Agency to implement a $200m electricity transmission expansion programme in Lagos and Ogun states.
The former Minister of Power, Abubakar Aliyu, had said the aim of the programme was to expand the transmission network in the identified states so as to effectively support industries in the South-West.