Nigeria’s Power Sector Overhaul to Tap Private Investment in $10bn Ambition

Nigeria’s Federal Government has unveiled plans to draw private sector investment into a $10 billion initiative designed to secure a stable, round-the-clock power supply across the country. This ambitious target, projected to span the next five to ten years, forms part of a larger strategy to end Nigeria’s longstanding energy supply crisis.

The proposal took centre stage during a recent meeting between Dr. Jobson Ewalefoh, Director-General of the Infrastructure Concession Regulatory Commission (ICRC), and Adebayo Adelabu, the Minister of Power, in Abuja. The government and the ICRC emphasised the need for private sector expertise and capital through public-private partnerships (PPPs), acknowledging that the financial and technical resources required to revamp Nigeria’s grid far exceed the government’s capabilities alone.

In a statement from the ICRC’s acting Head of Media and Publicity, Ifeanyi Nwoko, the Commission outlined the pressing need for an overhaul of existing power infrastructure. Adelabunoted that achieving a 24-hour power supply across Nigeria would require a “minimum funding requirement of about $10 billion over the next decade.” He added, “The government cannot afford that when other critical sectors are also in need of funding… This is why we must harness private sector funds while retaining government oversight and ownership.”

The collaboration with private investors will involve concessions under the regulatory framework of the ICRC. Dr. Ewalefoh affirmed that the Commission’s role will be to attract private investment into Nigeria’s power sector, aimed not only at improving electricity reliability but also at stimulating foreign investment in related industries. He noted that challenges in Nigeria’s power sector go beyond funding alone and require inter-agency cooperation to tackle persistent structural and operational issues.

Following a recent directive by Adelabu to replace ageing grid equipment, the Ministry of Power is seeking additional funding through the 2024 Supplementary Budget and 2025 Appropriation Bill to stabilise the grid. The Minister acknowledged, however, that long-term solutions would need sustained private sector involvement and adherence to streamlined, tightly-regulated PPP processes.

Dr. Ewalefoh underscored the ICRC’s commitment to safeguarding public interests, noting that stringent conditions would be embedded into all PPP agreements. He stated, “Any preferred bidder who defaults on the terms will face automatic contract nullification.” This, he added, was essential to prevent delays and ensure only capable entities participate in the power sector’s transformation.

The Commission’s six-point policy, recently introduced to accelerate PPP delivery, is expected to foster a conducive environment for private investment in Nigeria’s power infrastructure. As Nigeria grapples with the demands of modernising its power grid, both government and private stakeholders are now seeking a united approach to power sector reform.