FG Spends N10tn On Power Since Privatisation

The Federal Government of Nigeria has spent over N10tn on the country's electricity sector since its privatisation in 2013. Despite this huge investment, the sector still struggles with unstable electricity supply. The Managing Director of FGN Power Company Limited, Kenny Anuwe, disclosed this at the sixth annual conference of the Power Correspondents Association of Nigeria in Abuja. The conference focused on Nigeria's roadmap to reliable and affordable electricity under the Federal Government's ambition to grow the economy to $1tn by 2030.

Anuwe stressed that public funding alone could not address the country's electricity challenges. He called for increased private sector participation and alternative financing models to accelerate infrastructure development. The conference was themed, "$1trn Economy: Nigeria's Roadmap to Reliable and Affordable Power Supply." Anuwe acknowledged that government funding had been significant but insufficient to meet the sector's ambitions.

The 2013 power sector privatisation transferred the country's 11 distribution companies and six generation companies to private investors, while the Federal Government retained ownership of the transmission network. Despite successive government interventions, electricity supply has remained unstable due to inadequate generation, gas shortages, weak transmission and distribution infrastructure, mounting sector debts, and poor investment.

Anuwe described the continued dependence on government funding as unsustainable, noting that the Federal Government was responsible for more than 95 per cent of new infrastructure investment in the sector. He said the country needed simpler investment structures, predictable regulations, clear institutional responsibilities, and commercially viable projects to attract private capital. The FGN Power Company is targeting an investment structure that could attract $1bn, with the Africa Finance Corporation expected to match the amount.

The company's ongoing Presidential Power Initiative projects are expected to deliver additional transmission capacity, with a target of 5,540 megawatts by 2029 and at least 60 per cent improvement in grid reliability. The projects include a second batch of 12 Siemens substations and special projects involving Omotosho substations, which are expected to cumulatively deliver nearly 3,400MW. Anuwe said most of the ongoing first-phase transmission substation and line projects were now expected to be completed in the first quarter of 2027, following delays.

The Minister of Power, Joseph Tegbe, said the Federal Government had developed a four-pronged roadmap to address the sector's challenges through grid stabilisation, sector liquidity and sustainability, asset optimisation, and expansion and enhancement of the national grid. He said the government had raised N1.23tn under its N3.3tn plan to settle verified legacy debts owed to electricity generation companies. More than 2.8 million electricity customers have been metered under the Presidential Metering Initiative.

Tegbe also disclosed that additional transmission capacity exceeding 15,000 megavolt-amperes had been added to the national grid between 2023 and October 2026. The government is adopting a corridor-based approach to improve electricity supply in major economic centres, beginning with the Lagos-Ogun axis and Abuja franchise area, which together account for more than 50 per cent of national electricity demand. The proposed 24-hour electricity zones would align generation, transmission, and distribution capacity with demand in industrial clusters.

Key points

• The Federal Government has invested over N10tn in Nigeria's electricity sector since privatisation in 2013.
• The sector still struggles with unstable electricity supply despite huge government investment.
• The government is seeking increased private sector participation and alternative financing models to address the sector's challenges.