FG seeks private investment amid N10tn power sector spending

The Federal Government says it has invested more than N10tn in Nigeria’s electricity sector since its privatisation in 2013, but the intervention has yet to deliver the reliable power supply expected from the reform.

The Managing Director of FGN Power Company Limited, Kenny Anuwe, on Thursday said the huge government spending has kept the industry afloat but stressed that public funding alone could not address the country’s electricity challenges.

He called for increased private sector participation and alternative financing models to accelerate infrastructure development.

Anuwe disclosed this at the sixth annual conference of the Power Correspondents Association of Nigeria in Abuja, where stakeholders examined the country’s roadmap to reliable and affordable electricity under the Federal Government’s ambition to grow the economy to $1tn by 2030.

The conference themed, ‘$1trn Economy: Nigeria’s Roadmap to Reliable and Affordable Power Supply’, raises fresh questions about the outcome of the 2013 power sector privatisation, which transferred the country’s 11 distribution companies and six generation companies to private investors, while the Federal Government retained ownership of the transmission network.

Despite successive government interventions, electricity supply has remained unstable, with inadequate generation, gas shortages, weak transmission and distribution infrastructure, mounting sector debts and poor investment continuing to undermine the industry.

Anuwe acknowledged that government funding had been significant but insufficient to meet the sector’s ambitions.

“Government has invested over N10tn in the electricity sector since the advent of privatisation. But is it enough? How much money is enough? If government didn’t invest that money, the industry would not be standing today. No matter how you look at it, no matter how critical you are about what government’s role is, if government did not put that money in, the industry would not be standing,” he said.

He, however, described the continued dependence on government funding as unsustainable, noting that the Federal Government was responsible for more than 95 per cent of new infrastructure investment in the sector.

“That’s not why we privatised. We have all kinds of excuses why that has happened. And a lot of them are legitimate. But it’s time for us to move from excuses to looking at how to fix it. It does not need government to do everything. I believe that government cannot do everything,” Anuwe said.

• FG spends N10tn on power sector since privatisation
• Stable electricity unlikely without cost-reflective tariffs — FG
• Ogun residents groan over two-month blackout

He said the country needed simpler investment structures, predictable regulations, clear institutional responsibilities and commercially viable projects to attract private capital.

According to him, the FGN Power Company is targeting an investment structure that could attract $18bn from financiers, alongside plans to capitalise the company with at least $1bn, with the Africa Finance Corporation expected to match the amount.

He disclosed that the company’s ongoing Presidential Power Initiative projects were expected to deliver additional transmission capacity, with a target of 5,540 megawatts by 2029 and at least 60 per cent improvement in grid reliability.

The projects include a second batch of 12 Siemens substations and special projects involving Omotosho substations, which are expected to cumulatively deliver nearly 3,400MW.

The Minister of Power, Joseph Tegbe, in his address, said the Federal Government had also developed a four-pronged roadmap to address the sector’s challenges through grid stabilisation, sector liquidity and sustainability, asset optimisation, and expansion, including enhancement of the national grid.

He said the government had raised N1.23tn under its N3.3tn plan to settle verified legacy debts owed to electricity generation companies.

According to him, more than 2.8 million electricity customers have been metered under the Presidential Metering Initiative, while additional transmission capacity exceeding 15,000 megavolt-amperes had been added to the national grid between 2023 and October 2026.

“Let me inform this gathering that we have developed a four-pronged roadmap to address the power sector challenges comprehensively. These are Grid Stabilisation, Sector Liquidity

and Sustainability, Asset Optimisation, and Expansion and Enhancement of the grid. Central to this plan is a corridor approach that prioritises major load centres for reliable, round- the-clock electricity supply. A technical audit has been commissioned to establish a robust diagnostic baseline, identify critical constraints and guide the prioritisation, sequencing and execution of interventions. The corridor approach gives this roadmap a practical industrial focus.

“In the past two months alone, I have commissioned newly installed substation equipment across Kumbotoso, Dankata, Mashi, Dan-Agundi, Apapa, Ijora, Ikeja, Biliri, Walalambe and other locations, adding over 1,300MVA to Nigeria’s transmission capacity. This has unlocked more power to the respective Distribution Companies for onward distribution to industrial and household customers,” Tegbe said.