Government Unveils New Plan to Reset Power Sector

The Nigeria power sector is undergoing another major reform as the Federal Government seeks to address structural challenges that have limited electricity supply for decades. Despite about ₦10 trillion in public funding and intervention programmes over the past 13 years, electricity generation has remained far below national demand, prompting a new strategy focused on infrastructure, market sustainability, and investor confidence.

Speaking on the sector’s transformation agenda, Minister of Power Joseph Tegbe said the government is tackling long-standing weaknesses that have prevented the industry from reaching its full potential. He outlined key initiatives, including a technical audit of the national transmission network, harmonisation of federal and state electricity regulations, a grid stabilisation programme, measures to improve sector liquidity, strategic asset optimisation, and the development of a national super grid.

Tegbe said these reforms are expected to deliver a stronger electricity network within the next two to three years. According to him, Nigerians should experience improved grid reliability, lower technical losses, expanded electricity access, stronger market discipline, increased investor confidence, and higher operational capacity across the Nigeria power sector.

Government records show that several intervention programmes have been introduced since the 2013 privatisation of the electricity industry. These include the Central Bank of Nigeria’s ₦213 billion Nigerian Electricity Market Stabilisation Facility, the ₦701 billion Payment Assurance Guarantee, the National Mass Metering Programme, the Presidential Metering Initiative, the €2.3 billion Siemens Presidential Power Initiative, multilateral financing from the World Bank and African Development Bank, and the recently launched ₦4 trillion Presidential Power Sector Debt Reduction Programme.

Despite these investments, electricity generation has remained largely unchanged. According to the Nigerian Electricity Regulatory Commission (NERC), average available generation capacity from the country’s 28 grid-connected power plants stood at 4,457.96 megawatts in the first quarter of 2026, while average hourly generation reached 4,112.72 megawatts. Both figures remain well below the Federal Government’s 6,000-megawatt target and significantly short of Nigeria’s estimated demand of more than 30,000 megawatts.

Liquidity challenges also continue to affect the industry. The Association of Power Generation Companies (APGC) said unpaid government obligations linked to electricity subsidies have reached ₦6.2 trillion, although the Federal Government disputed that figure after conducting a verification exercise. Finance Minister Taiwo Oyedele said verified liabilities were reduced to about ₦3.3 trillion, while the APGC argued that generation companies were not involved in the reconciliation process and questioned the outcome.

To improve liquidity, the government has turned to the domestic bond market through the Presidential Power Sector Debt Reduction Programme. About ₦333 billion has already been paid to generation companies, while a new ₦729 billion bond has been issued to finance additional settlements. Officials believe the programme will restore confidence, improve cash flow, and attract new investment into the Nigeria power sector.

Industry stakeholders, however, argue that financial intervention alone will not solve the sector’s problems. Kunle Olubiyo, President of the Nigeria Consumer Protection Network, said continued government involvement has encouraged inefficiency and created opportunities for revenue leakages. He called for deeper privatisation, including the sale of government interests in distribution companies and the restructuring of the Transmission Company of Nigeria (TCN).

Similarly, Israel Abraham, President of the Chartered Institute of Power Engineers of Nigeria (CIPEN), attributed the sector’s weak performance to inadequate technical leadership. He said experienced professionals should manage key institutions to improve efficiency and accelerate reforms.

Tegbe maintained that the government’s reforms are already producing early results. He said electricity generation has consistently reached 5,000 megawatts over the past two weeks, while the Presidential Metering Initiative and the newly launched Power Force programme are helping to close the country’s metering gap and train thousands of young Nigerians in technical skills.

Although significant challenges remain, the government believes the current reforms will create a more reliable, transparent, and financially sustainable Nigeria power sector, positioning electricity as a driver of economic growth rather than a barrier to national development.

Which reform do you think will have the greatest impact on improving Nigeria’s electricity supply and reliability?