There is an indication that the federal government is liquidating the N4 trillion legacy electricity debt to pave the way for Nigeria to benefit from the World Bank/African Development Bank (AfDB) $48 billion intervention fund for electricity access to 300 million people in Africa by 2030.
The government, which, at a meeting with the operators last month, announced the option of a N4 trillion bond program to settle the legacy debt, which the Power Minister, Bayo Adelabu said has derailed the sector’s progress, could shut down generation, and crippled the economy, however said it would verify the debt to ensure that every liability claimed is valid and verifiable.
With the paucity of funds, and the shortfall of revenue due to the 1.67 million barrels per day average production in the first half of 2025, which was significantly below the 2.06 million barrels budgeted, coupled with the average price of $67 per barrel, that is below the budget benchmark of $75, Nigeria requires the World Bank/AfDB assistance. The government also saw the need to settle the legacy debts that had crippled the operators, for it to achieve its aim.
For the World Bank/AfDB intervention, Nigeria has submitted detailed compacts on how to scale up electricity access and Wale Edun, the Finance Minister and Coordinating Minister of the Economy, said that, with about 40 per cent of the citizens without access to electricity, the country expects to be a beneficiary of the 300 million scheme.
The World Bank, and the AfDB, in April 2024 launched a bold scheme to supply electricity to an additional 300mn people across the region by 2030, working alongside partners including the Rockefeller Foundation, the Global Energy Alliance for People and Planet, and Sustainable Energy For All, to attract raising $90bn worth of investment for the continent’s power needs.
The initiative, dubbed Mission 300, aims to raise an additional $90bn to fund electrification projects via both extensions and densification of existing national grids, and the deployment of off-grid projects using largely solar power technology by 2030.
Beneficiaries of the 300 million scheme are 14, but 12 countries including Chad, Cote D’Ivoire, Democratic Republic of Congo, Liberia, Madagascar, Malawi, Mauritania, Niger, Nigeria, Senegal, Tanzania, and Zambia have unveiled detailed compacts that set targets to scale up electricity access, increase the use of renewable energy, and attract additional private capital. The first round of National Energy Compacts has been adopted at the highest levels of government, and preparations for the next cohort of compacts are now underway.
“So Nigeria would expect to be a substantial part of that. We are leading the way”, stated the Finance Minister and Coordinating Minister of Economy, Wale Edun, while speaking on Nigeria’s chance in benefitting from the Funding.
He explained that Nigeria is one of the first to sign a compact that specifies exactly how it would bring distributed renewable energy, the opportunities in off-grid electricity generation and distribution, and the micro-level provision of electricity through solar and other means to more Nigerians, with collaboration and investments from the government and the private sector.
The minister said the likes of the International Finance Corporation (IFC) have already combined with the Ministry of Power and others, and are already implementing specific initiatives, specific investments on that mission 300, knowing that Nigeria has about 40 per cent of its population without electricity and would be a substantial part of that number.
Edun, who praised the efforts of the administration to provide electricity this year, stated, “There has been no national grid collapse in 2025. That’s the first time in years. Peak generation has exceeded 5,000 megawatts, and steps are underway. We do have a target of increasing to 6,000 megawatts by the end of this year… we are looking to complete the Ajaokuta-Kaduna-Kano AKK pipeline to provide reliable and affordable energy for industrial growth.”
To achieve all of this, he said, approvals are in place to liquidate N4 trillion legacy debts and implement a sustainable framework under the Electricity Act. It is a combination of removing or repaying or refinancing outstanding debts so that those who are owed can, in turn, pay out their obligations, and look for sustainability going forward.
“We have already onboarded IFC. And for the private sector, for young entrepreneurs, this is utilities. This is a veritable opportunity to take advantage of what our development partners are putting on the table, and take advantage of our liberalisation of our electricity laws to go into what would be profitable and sustainable over time.
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