ABUJA — Despite the expenditure of about N10 trillion in public funds through various interventions in Nigeria’s electricity sector over the years, power generation has remained largely stagnant, with the country still struggling to meet its growing electricity demand.
The funds, deployed through interventions, payment guarantees, debt settlement schemes, multilateral loans and infrastructure financing, were intended to address persistent liquidity challenges, improve electricity supply and strengthen critical infrastructure across the sector.
However, available data indicate that the huge financial commitments have not translated into a significant increase in electricity generation or reliable power supply.
The Federal Government has now announced plans to reset the sector by tackling what it described as longstanding structural deficiencies that have hindered the industry for more than four decades.
The Minister of Power, Joseph Tegbe, said the government was determined to address the challenges affecting generation, transmission, distribution, regulation, governance and market liquidity.
According to him, the objective is to make electricity more available, improve the reliability of the national grid, achieve financial sustainability in the electricity market and restore investor confidence.
Tegbe said the government’s reform agenda would include a comprehensive technical audit of the national transmission network, harmonisation of federal and state electricity regulations, a grid stabilisation programme, measures to address sector liquidity, strategic asset centralisation and the development of a Super Grid Programme.
He expressed optimism that within the next two to three years, Nigerians would begin to experience a stronger and more reliable grid, reduced technical losses, improved market discipline, greater investor confidence, expanded electricity access and increased operational capacity.
Years of Spending, Little Improvement
Findings on government spending in the electricity sector since the November 2013 privatisation show that successive administrations have committed significant resources to addressing the sector’s challenges.
Despite these investments, average electricity generation has hovered around 4,500 megawatts (MW) over the period, far below the 20,000MW target and the estimated 30,000MW required to meet the country’s electricity needs.
The latest data from the Nigerian Electricity Regulatory Commission (NERC) showed that in the first quarter of 2026, the average available generation capacity from 28 grid-connected power plants stood at 4,457.96MW.
Actual average hourly generation during the period was 4,112.72MW, significantly below the Federal Government’s 6,000MW target.
The figures highlight the continuing gap between Nigeria’s electricity demand and the amount of power available to consumers, despite years of government interventions and reforms.
Liquidity Crisis Deepens
While electricity supply remains inadequate, the financial crisis affecting the Nigerian Electricity Supply Industry (NESI) has continued to worsen.
The Association of Power Generation Companies (APGC) has claimed that debts arising from the government’s failure to fully fund electricity subsidies have risen to N6.2 trillion.
The association said the figure comprises approximately N4 trillion accumulated between 2015 and 2024, as well as an additional N2.2 trillion incurred in 2025.
The Federal Government, however, has disputed the figure.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said a comprehensive verification exercise had reduced the verified electricity sector liabilities from about N4 trillion to approximately N3.3 trillion.
According to him, the reduction followed a line-by-line reconciliation of invoices and services rendered.
However, the Executive Director of APGC, Dr Joy Ogaji, disputed the government’s position, saying generation companies were not involved in the reconciliation exercise.
Ogaji challenged the government to publish the details of how it arrived at the N3.3 trillion figure.
She argued that the amount was not even sufficient to settle the debts owed to gas suppliers, raising concerns about how generation companies would meet their operational expenses, including maintenance and staff costs.
Data from the Nigerian Bulk Electricity Trading Plc (NBET) also showed the scale of the government’s outstanding subsidy obligations.
Between April 2025 and April 2026, the Federal Government received electricity subsidy invoices amounting to N1.859 trillion but paid only N76.95 billion, leaving outstanding obligations of approximately N1.78 trillion.
FG Turns to Bond Market
In an effort to tackle the mounting financial obligations in the electricity market, the Federal Government has turned to the domestic bond market to raise funds for payments to generation companies under the Presidential Power Sector Debt Reduction Programme.
About N333 billion has reportedly been paid to electricity generation companies, while a fresh N729 billion bond has been launched to finance additional settlements.
The latest bond issuance, unveiled at an investors’ forum organised by NBET in Abuja, represents the second series under the N4 trillion debt reduction programme.
It follows an earlier N501.02 billion bond issued by the government.
Officials said the debt reduction programme was designed to restore liquidity to the electricity market, improve investor confidence and create the financial stability required to attract new investments into the sector.
Stakeholders Call for Deeper Reforms
Reacting to the continued poor performance of the electricity industry, the President of the Nigeria Consumer Protection Network, Kunle Olubiyo, argued that the actual subsidy burden could be lower than some figures being presented by market participants.
He said prolonged government involvement in the electricity market had contributed to inefficiencies and created opportunities for revenue leakages and inflated claims.
Olubiyo maintained that the government must address waste and leakages across the electricity value chain if the sector is to become financially sustainable.
He also advocated for the complete privatisation of the electricity industry, arguing that greater private sector participation would force operators to improve efficiency, automate operations and eliminate leakages that ultimately contribute to higher electricity tariffs.
He urged the Federal Government to divest its remaining interests in electricity distribution companies and consider unbundling and privatising the Transmission Company of Nigeria (TCN).
According to him, the government should focus primarily on policy formulation and regulation while allowing private operators to drive investment and efficiency in the sector.
The President of the Chartered Institute of Power Engineers of Nigeria (CIPEN), Engr. Israel Abraham, also blamed part of the sector’s poor performance on the appointment of non-technical professionals to manage critical institutions.
He argued that the electricity industry requires highly skilled and technically competent professionals to manage its complex operations.
FG: We Are Resetting the Sector
Responding to concerns over the sector’s continued underperformance, the Minister of Power, Joseph Tegbe, said the government had begun implementing a comprehensive plan to reset the electricity industry.
He said the Federal Government’s objective was to make electricity more available, strengthen the national grid, create a financially sustainable market and restore confidence among investors.
Tegbe said the ultimate goal was to make electricity a catalyst for national productivity and economic growth rather than a major constraint.
He also praised the leadership of President Bola Tinubu, saying the administration had demonstrated strong political commitment to electricity sector reform and the implementation of the Electricity Act.
According to him, the Electricity Act has created a new constitutional and regulatory framework that allows states to develop electricity markets based on their economic realities.
He said the Federal Government viewed the decentralisation of the electricity industry as an opportunity to promote innovation, competition and investment across the country.
Tegbe also pointed to the government’s efforts to address the liquidity crisis, saying the Power Sector Bond initiative was being advanced to resolve legacy debts owed to generation companies, gas suppliers and other participants in the electricity market.
He described the initiative as a strategic intervention aimed at restoring confidence, attracting fresh investment and strengthening commercial discipline in the Nigerian Electricity Supply Industry.
Metering at the Centre of Reform
The minister said metering had been placed at the centre of the government’s electricity reform agenda.
For decades, estimated billing has remained a major source of tension between electricity consumers and distribution companies.
Tegbe said the Presidential Metering Initiative was designed to move the country towards universal metering, ensuring that consumers pay for the electricity they actually consume.
He said the administration had also prioritised investment in transmission infrastructure, expanded rural electrification, strengthened coordination among institutions across the electricity value chain and introduced reforms aimed at attracting private capital while protecting the public interest.
5,000 Youths to Support Meter Installation
As part of the new interventions, Tegbe announced the inauguration of the Power Force, an initiative expected to engage 5,000 Nigerian youths in meter installation across the country.
He said the programme would help accelerate the closure of Nigeria’s metering gap while also developing a skilled workforce for the electricity industry.
The minister also said the government had made progress in resolving longstanding challenges surrounding meter procurement.
According to him, the country had also recorded improvements in electricity generation, with generation reportedly reaching and sustaining approximately 5,000MW over the preceding two weeks.
He attributed the improvement to better operational coordination, improved plant availability and stronger engagement among stakeholders across the electricity value chain.
FG Unveils Six-Point Sector Transformation Plan
Despite the recent improvements, Tegbe acknowledged that significant challenges remain.
He stressed that increasing generation alone would not solve Nigeria’s electricity crisis, noting that power must be generated, transmitted, distributed and paid for effectively.
He said the government’s Sector Transformation Agenda was therefore designed to address problems across the entire electricity value chain.
The minister outlined the following key interventions:
1. Technical Audit of the National Transmission Network
The government will conduct a comprehensive technical audit of the national transmission network to identify ageing infrastructure, overloaded substations, weak transmission corridors, protection failures, system bottlenecks and other operational vulnerabilities.
The audit, according to Tegbe, will provide the information required to prioritise investments, reduce system failures, improve planning and ensure that public funds invested in the sector deliver measurable results.
2. Harmonisation of Federal and State Electricity Regulations
Following the implementation of the Electricity Act and the emergence of state electricity regulatory commissions, the government plans to work with the Nigerian Electricity Regulatory Commission and state regulators to resolve areas of jurisdictional conflict.
The objective is to establish a coordinated regulatory framework that will provide certainty for investors and ensure that electricity decentralisation produces greater efficiency rather than confusion.
3. Grid Stabilisation Programme
The Federal Government plans to commence strategic investments in three major transmission corridors: the Lagos Corridor, the Enugu-Port Harcourt Corridor and the Abuja-Kaduna-Kano Corridor.
The initiative is expected to improve the stability and reliability of the national grid and strengthen the transmission of electricity across key economic regions.
4. Sector Liquidity and Sustainability
The government said it would focus on reducing technical and commercial losses while modernising critical transmission infrastructure.
The intervention will complement the Presidential Metering Initiative by improving revenue collection and reducing losses associated with estimated billing and inadequate metering.
5. Strategic Asset Centralisation
The ministry also plans to pursue strategic asset centralisation and optimisation by connecting under-utilised electricity assets with industrial clusters, manufacturing hubs and captive economic corridors.
The initiative is expected to improve the utilisation of existing infrastructure and support industrial development.
6. Super Grid Programme
The Super Grid Programme will serve as a medium- and long-term strategy for expanding Nigeria’s transmission backbone along critical corridors.
According to the minister, the programme will strengthen the national grid, improve redundancy, increase the capacity to transfer electricity across regions and create dedicated electricity corridors capable of supporting future industrial growth.
Tegbe said the Federal Government expects to record visible improvements in electricity availability in the coming months.
He, however, acknowledged that the challenges facing Nigeria’s electricity sector would not be resolved overnight, stressing that the success of the reform agenda would depend on coordinated action across generation, transmission, distribution, regulation and market financing.
The minister expressed confidence that the ongoing interventions, if effectively implemented, would place the sector on a more sustainable path and gradually transform electricity from a major constraint into an enabler of economic growth and national productivity.
