FG Targets $15bn Power Sector Investment, Cheaper Energy Units

By Adedapo Adesanya

The federal government is taking bold steps to revive its faltering power sector, aiming to attract $15 billion in private investments to bridge a $23 billion funding gap, according to Bloomberg.

The initiative revealed at the ongoing World Bank Energy Summit in Tanzania, aims to tackle the country’s electricity crisis and provide power to 86 million Nigerians currently living without access to electricity.

As part of the plan, households will receive a subsidized 50 kilowatt hours (kWh) of electricity monthly, either through direct consumption or vouchers.

The Bola Tinubu led government outlined a plan that combines higher electricity tariffs with fresh subsidies to ease the burden on households.

Under the proposal, the 50 kilowatt hours of subsidized electricity monthly, is part of strategy to make electricity more accessible and affordable for millions of Nigerians

Despite being Africa’s top natural gas producer with abundant hydro and solar resources, Nigeria generates around 13,000 megawatts of electricity for over 200 million people.

The plan also seeks to double the number of households connected to the grid annually and boost renewable energy from 22 per cent to 50 per cent of the generation mix within five years.

With the removal of electricity subsidies for about 15 per cent of urban households last year, this tripled tariffs as Nigeria paid around N2.2 trillion on subsidies last year alone.

The new plan aims to implement full-cost tariffs by 2027 while providing a buffer for vulnerable households.

However, a buffer mechanism will be introduced to protect vulnerable households from the full impact of higher tariffs.