Power
Nigeria clears part of power sector debt and targets grid upgrades
The federal government has cleared over half of its financial liabilities to electricity operators as part of broader efforts to boost transmission capacity and infrastructure.
Key points
- The administration paid N1.2 trillion out of N2.3 trillion owed to electricity operators.
- Power Minister Joseph Tegbe announced plans to expand transmission capacity beyond 19,000 megawatts.
- Federal authorities are clearing stalled port equipment and building a new national control centre.
What happened
According to BusinessDay, the Nigerian government has settled N1.2 trillion of the N2.3 trillion accumulated debt owed to operators within the power industry. Joseph Tegbe, the minister of power, stated that this financial intervention aims to alleviate liquidity bottlenecks affecting both electricity generation and gas supply networks across the country. Alongside debt servicing, the administration has initiated a comprehensive technical evaluation of national power assets to identify deteriorated installations and prioritize necessary reinforcements.
To optimize administrative and operational oversight, the nation has been segmented into three distinct energy zones. Lagos and its surrounding areas represent roughly half of the total national power demand, while the remaining zones encompass Abuja, Kano, and other regions designated for infrastructure enhancements. Plans are underway to scale up transmission capacity from approximately 5,000 megawatts to an ambitious target exceeding 19,000 megawatts, surpassing the current installed generation threshold of over 13,000 megawatts.
The Federal Executive Council has granted approval for three critical reinforcement schemes. These initiatives involve the modernization of the Katampe substation in the north-central zone, the provision of specialized transformers for the Egbin facility serving Lagos, and the conversion of a transmission route along the Shagamu corridor to a double-circuit configuration to enhance overall grid reliability.
Infrastructure and alternative energy
In addition to grid-focused interventions, authorities are advancing decentralized power solutions to reduce reliance on the main transmission network. Fourteen federal universities have received solar mini-grids with capacities varying between one and five megawatts, while additional institutions have secured funding through the Tertiary Education Trust Fund. Similar renewable energy installations have been finalized and energized across five teaching hospitals in collaboration with the health ministry.
Furthermore, following instructions from President Bola Tinubu, officials are processing the release of more than 300 consignments of electrical hardware currently detained at port facilities. The ministry is collaborating with customs and port authorities to deploy these assets to active job sites. Construction work has also commenced on a replacement facility for the 64-year-old national control centre located in Osogbo, Osun State, which will incorporate contemporary monitoring systems.
Why it matters
Chronic liquidity deficits and transmission bottlenecks have long constrained Nigeria's electricity value chain, resulting in frequent grid collapses and heavy reliance on expensive captive diesel generation by businesses and households. With a low electricity use per person of 140.6 kWh recorded in 2024 according to World Bank figures—compared to a global average of 3,708.5 kWh—expanding transmission capacity and resolving legacy debts are crucial steps toward stabilizing the domestic power market. For energy investors and industrial operators, sustained investments in grid resilience and decentralized renewable integration are essential to lowering operational expenditures and improving electricity access, which stood at 62.5 percent nationally in 2024.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Grids decide whether generation becomes power that homes and businesses can rely on. Generation mix, transmission and distribution losses, and tariffs together shape reliability and the case for investment.
62.5% of people in Nigeria had electricity in 2024Countries in this story
Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
