Nigeria’s power sector has faced several challenges over the last decade. Issues facing the sector include; inconsistent implementation of tariff policy; high, unsustainable losses in the distribution network.
The Federal Government of Nigeria (FGN) launched the Power Sector Recovery Programme (PSRP) to address the inefficiencies in the system. The FGN has also taken some critical actions to provide universal energy access. The Rural Electrification Strategy and Implementation Plan and the Nigeria Electrification Project aim to improve access for the underserved rural populations and institutions.
In addition, the Presidential Power Initiative (PPI) aims to increase the power supply to 7GW in its first phase.
The World Bank responded to the FGN programs with a large and comprehensive portfolio of projects. The Power Sector Recovery Programme (PSRO, US$750m) supports the implementation of critical reforms that aim to improve power sector policy and regulatory environment, enhance transparency, strengthen the sector’s financial sustainability and reduce fiscal risk.
The Nigeria Electrification Project (NEP, US$350m) supports expanding electricity access through off-grid solutions to remote rural communities using private sector financing models.
On Tuesday, 14th June 2022, The Electricity Hub, an electricity-focused media organisation in collaboration with the World Bank, organised its 70th Power Dialogue to assess the key achievements of the sector and the challenges hindering universal energy access.
The panel discussants included Engr. Abubakar Aliyu, Honourable Minister of Power, Federal Republic of Nigeria, Shubham Chaudhuri, Country Director, The World Bank, Ashish Khanna, Regional Director for Infrastructure, Africa West and East, The World Bank, and Narlene Egu, Senior Energy Advisor and Team Lead, USAID/Power Africa Nigeria. The Head of Operations for The Electricity Hub, Okoro Uchechukwu, noted that “this session is part of a series of Dialogues – organised in collaboration with the World Bank – focusing on improving private sector investment and participation in Nigeria’s Power Sector”.
Engr. Aliyu stated that the Nigeria Transmission Expansion Programme (NTEP), financed by the World Bank, the African Development Bank, and the Japan International Cooperation Agency, has concluded its first phase (NTEP-1) and is set to commence its second phase, which will focus on grid expansion.
The NTEP aims to increase the wheeling capacity of the transmission network. The Presidential Power Initiative (PPI), which seeks to increase the generation capacity from 4,500MW to 7,000MW in its first phase and attain 25,000MW by 2025, has begun with early works.
Aliyu added that the PPI team recently visited Germany to inspect the manufacturing and production process of ten (10) mobile substations and transformers. The equipment will be delivered to the country in Q4 2022. On the possibility of integrating renewables into the national grid, the Minister emphasised that the grid is yet to attain stability.
However, plans to diversify the nation’s energy mix are well underway. The Federal Government plans to execute 14 renewable energy projects with a cumulative capacity of 1,000MW. However, “these projects will be solely off-grid until the transmission network has been able to meet its baseload requirement.”
Shubham Chaudhuri, Country Director, The World Bank, noted that to achieve universal energy access in Nigeria, the government must have sustained commitment. There is a need for a clear regulatory and policy environment. This is essential to drive private sector investment, create incentive mechanisms for stakeholders and ensure sector accountability.
Shubham highlighted that the World Bank had approved about US$1.5 billion in new commitments to support the existing government initiatives for the power sector. He further stated that the power sector had experienced steady growth since establishing the Power Sector Recovery Programme (PSRP).
Deliberating on the electricity deficit gaps in the country, Ashish Khanna, Regional Director for Infrastructure, Africa West and East, The World Bank, added that the Nigeria Electrification Plan offers a huge opportunity for increased private sector participation.
He noted that the Rural Electrification Agency (REA) had achieved recent milestones through its Result-Based Financing programmes. The World Bank is dedicated to providing catalytic tools to improve the electricity supply in the country.
The Bank’s Nigerian engagement is one of the largest power sector engagements in the world; hence, more private sector participation is needed to enable the country to achieve universal energy access.
The panellists all agreed that stakeholder collaboration is key to improving the impacts of interventions in the sector. “Solving the sector’s challenges must be done collaboratively and not in silos,” Emeka Okpukpara, Partner Nextier Power stated, adding that prioritising, aligning and effectively executing interventions require increased coordination and collaboration between stakeholders.