Nigeria will need to spend at least $10 billion annually over the next two decades, roughly $200 billion in total, to achieve stable and reliable electricity, Minister of Power Adebayo Adelabu said on Tuesday.
“For us to achieve functional, reliable and stable electricity in Nigeria, we need not less than $10 billion annually for the next ten to twenty years,” Adelabu told journalists after the event. He acknowledged that foundational challenges—ranging from outdated infrastructure to policy misalignment—must be addressed to make such spending effective.
The comments arrive at a time when faith in Nigeria’s power sector management is already low. Despite investing more than $29 billion in the sector since the 1999 return to democracy—including a $16 billion investment under the administration of President Olusegun Obasanjo—power supply remains erratic, with less than 4,500 megawatts reliably reaching homes and businesses out of an installed generation capacity of over 13,000MW. Transmission and distribution losses, technical inefficiencies, and corruption have continued to cripple progress.
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Adelabu’s proposed $10 billion per year over 20 years, amounting to over N290 trillion at today’s exchange rate, is already being called excessive by energy analysts and economists, especially when viewed against Nigeria’s shrinking revenue base and ballooning debt profile.
With a population estimated at over 200 million, Nigeria certainly requires significant investment in generation, transmission, and distribution infrastructure. But experts say the core issue isn’t funding—it’s mismanagement.
“The problem is not getting the investors, the challenge is that investors do not see a clear line of sight for them to recover their money back and generate an alpha from the hurdle rate,” said energy analyst, Kelvin Emmanuel.
He attributed the situation to “improper pricing of tariff, improper pricing of gas, commercial losses from theft and estimated billing, technical losses from grid shutdown, lack of adequate transmission infrastructure, lack of guarantees in the commercial design of contracts and DisCo owners that are over-leveraged and are only skinning the cow to pay back debt.”
That fear is not unfounded. Nigeria is currently embroiled in a multi-million-dollar legal battle at the International Chamber of Commerce (ICC) in Paris over the Mambilla Hydroelectric Power Project, a $6 billion – 3,050MW project that was supposed to be Nigeria’s largest.
The contract, originally awarded to Sunrise Power and Transmission Company Limited, has become the subject of fraud allegations and counter-litigation between the Nigerian government and Sunrise. At the center of the controversy is Olu Agunloye, the former Minister of Power and Steel under President Obasanjo, who unilaterally awarded the over $6 billion contract to Sunrise in 2003 without following due process or securing Federal Executive Council approval.
The scandal has not only stalled progress on a project that could have significantly bolstered Nigeria’s generation capacity but also threatens to saddle the country with additional billions in damages if Sunrise wins its claims at the ICC.
In addition to Mambilla, Nigeria’s power sector is littered with abandoned or underperforming projects, from the Zungeru Hydroelectric Plant, still struggling with delays despite Chinese funding, to dozens of gas-powered plants built under the National Integrated Power Projects (NIPP) that remain underutilized due to poor transmission infrastructure and gas supply issues.
The privatization of power generation and distribution assets in 2013, hailed as a transformative reform, has largely failed to meet expectations. Distribution companies (DisCos) remain financially insolvent, with poor collection rates and weak service delivery. Many rely on government bailouts to remain operational, with the Federal Government still paying electricity subsidies to the tune of over N600 billion annually.
Adelabu, while highlighting the recent Electricity Act signed by President Bola Tinubu as a major step forward, acknowledged these systemic issues. He said decentralization now allows states to play active roles in power generation, transmission, and distribution, breaking from a federal monopoly that had long stifled innovation.
“This bill has achieved liberation and decentralization of the power sector to enable all levels of government—federal, state and local—to legally and morally play roles in the power sector,” the minister said.
Already, over eleven states have taken steps to develop independent electricity markets within their borders, with more expected to follow. But critics argue that legal autonomy alone won’t fix the power problem unless it’s matched with institutional accountability and execution capacity.
The Stark Contrast of Egypt’s Electrification Success
Adelabu’s proposed investment plan comes against the backdrop of a regional example that has achieved far more with less. Between 2014 and 2019, Egypt invested approximately $39 billion to double its electricity output and deliver a consistent power supply across the country.
Central to that investment was a landmark $4.4 billion deal with Siemens AG to construct three natural gas-fired power plants, completed in just 27 months. The plants—located in Beni Suef, Burullus, and New Capital—collectively added over 14,000MW to Egypt’s national grid, helping the country end frequent blackouts and even begin exporting electricity to neighboring countries.
In parallel, Egypt also took bold steps to gradually eliminate subsidies on electricity tariffs, helping to reduce fiscal pressure on the government while promoting efficiency. The reform-driven approach attracted private sector confidence and enabled rapid project execution—something Nigeria has struggled with for decades.
The Solar Push is Symbolic but Limited
The commissioning of the 2.5MW solar hybrid plant at NDA—part of the Energizing Education Programme (EEP) Phase II—is part of efforts by the Rural Electrification Agency (REA) to provide clean, off-grid energy to critical institutions. Abba Aliyu, REA’s Managing Director, described the project as “a national mission” aimed at enhancing academic performance, national security, and innovation.
But while the plant will reduce NDA’s reliance on diesel generators, its scale is a reminder of how small Nigeria’s renewable efforts are relative to the larger national challenge. Rural electrification accounts for less than 10% of Nigeria’s power mix, with limited contributions from solar, wind, or biomass.
Until large-scale generation and grid distribution systems are overhauled, and until fraud-ridden projects like Mambilla are tackled, analysts say symbolic efforts won’t yield the kind of transformational change Nigerians have waited decades for.