Nigeria’s struggling electricity sector has come under renewed scrutiny following plans by the presidency to install a ₦10 billion solar power system at the Presidential Villa, raising concerns about the government’s commitment to fixing the national grid.

President Bola Ahmed Tinubu had, during the 2023 campaign, pledged to deliver 15 gigawatts of electricity and ensure round-the-clock power supply within four years. However, nearly three years into the administration, power generation continues to fluctuate between 3,000 and 5,500 megawatts.

The proposed solar project at Aso Rock Presidential Villa, alongside an additional ₦7 billion allocation for upgrades in the 2026 budget, has triggered criticism, with many interpreting the move as a sign of declining confidence in the national grid.

Former presidential candidate, Peter Obi, described the development as troubling, arguing that government institutions should lead efforts to strengthen public infrastructure rather than abandon it.

He said the decision sends the wrong signal to millions of Nigerians who remain dependent on a fragile grid plagued by frequent collapses and unreliable supply.

The controversy reflects a broader shift among Nigeria’s elite and corporate sector away from public electricity supply. Across the country, more than 250 manufacturers and large institutions have adopted self-generation, collectively producing about 6,500 megawatts—exceeding average grid output.

Major industrial players, including the Dangote Group, now rely heavily on captive power systems, with the group alone generating approximately 1,500 megawatts for its operations.

Experts warn that this trend is creating a two-tier electricity system, where wealthy individuals and organisations secure independent power while ordinary citizens remain tied to an unreliable grid.

Data from the Nigerian Electricity Regulatory Commission indicates that available capacity rose modestly from about 4,387 megawatts in 2023 to 5,395 megawatts in 2025. However, actual generation has remained inconsistent due to gas shortages, infrastructure constraints, and transmission bottlenecks.

Minister of Power, Adebayo Adelabu, revealed that over 10,000 megawatts of installed capacity remains stranded, largely due to weak transmission and distribution systems.

Industry stakeholders say persistent debt across the value chain, inadequate metering, and high operational losses continue to discourage investment in the sector.

Energy analysts also warn that the growing reliance on self-generation is fragmenting the electricity market, diverting billions of naira into private solutions rather than strengthening national infrastructure.

As the administration advances toward the midpoint of its tenure, the gap between policy promises and sector performance remains a major concern.

For many Nigerians, the shift by the presidency toward solar power underscores a deeper reality: while alternative energy solutions may offer relief for the elite, millions of citizens remain dependent on a national grid that continues to fall short of expectations.

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Three West African countries — Benin, Togo, and Niger — owe Nigeria a total of $9.55 million for electricity supplied in the last quarter of 2025, according to the Nigerian Electricity Regulatory Commission.

Data from the commission’s Q4 2025 report showed that invoices worth $20.44 million were issued to the three countries, but only $10.89 million was paid, reflecting a 53.28% remittance performance.

The report revealed varying levels of compliance among the countries’ power utilities. While some operators recorded moderate payments, others failed to meet obligations, with one supplier making no payment at all during the period.

Despite the shortfall, the Société Béninoise d’Energie Electrique (SBEE) later paid an additional $3.54 million to offset part of its outstanding debt.

Within Nigeria, domestic bilateral customers showed stronger compliance, remitting ₦3.5 billion out of ₦4.17 billion, representing an 84.23% payment rate. However, Ajaokuta Steel Company, classified as a special customer, was billed ₦1.26 billion but made no payment during the period.

The development highlights Nigeria’s ongoing struggle to recover payments for electricity exports, even as the country grapples with internal power supply challenges. Analysts warn that persistent payment defaults could place additional financial pressure on power generation companies and disrupt the stability of the electricity market.

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Nigeria’s electricity subsidy rose to ₦1.05 trillion in the first half of 2025, almost equal to the ₦1.12 trillion revenue earned by the nation’s 11 electricity distribution companies (DisCos). A Proshare Research report shows a sector burdened by rising costs and unsustainable subsidies.

The subsidy, meant to make tariffs affordable, continues to drain public funds and discourage private investment. Despite higher tariffs for Band A consumers and improved collection efficiency of 76%, subsidy costs climbed alongside revenue growth.

Liquidity remains tight for every ₦100 billed, about ₦25 is lost to poor remittance, theft, and weak compliance. In July 2025, DisCos recorded a ₦49.18 billion shortfall as tariffs lagged behind real costs.

Metering improved slightly to 54%, yet nearly half of electricity consumers remain unmetered. Generation companies (GenCos) recovered only 28% of debts in 2024, with total sector arrears exceeding ₦4 trillion.

Although President Bola Tinubu approved the securitisation of these debts, rising subsidy bills have eroded the gains. Power generation remains stagnant at 5,396MW, far below the 13,000MW capacity.

The government has introduced major reforms  including the National Integrated Electricity Policy (NIEP), Mission 300, and several multibillion-dollar funding plans but analysts say real progress is still lacking.

“Government efforts are commendable, but results remain on paper,” Proshare noted.

Until deeper structural reforms take hold, Nigeria’s power sector will remain caught in a cycle where every gain is offset by the cost of keeping the lights on.

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This directive comes in the wake of a controversial move by the Enugu Electricity Regulatory Commission (EERC), which recently reduced the Band A electricity tariff from ₦209/kWh to ₦160/kWh, directing the state’s electricity distributor, MainPower, to implement the new rate from August 1.

NERC, in a formal notice on Thursday, clarified that while states with full regulatory oversight of intrastate electricity markets are allowed to determine tariffs for end-users, they are still bound to factor in the full wholesale cost of power sourced from the national grid. Failure to do so, the Commission said, would amount to market distortion and financial imbalance across the Nigerian Electricity Supply Industry (NESI).

“As states do not have jurisdiction over the national grid or generating stations licensed under federal law, they must fully incorporate the wholesale costs of grid-supplied electricity into their tariff structures,” NERC stated. “Any deviation must be compensated by the state in the form of subsidies to avoid destabilizing the national power market.”

The Commission expressed concern over EERC’s decision, noting that it had slashed the average generation tariff of ₦112.60/kWh down to ₦45.75/kWh, resulting in a ₦66.85/kWh shortfall, which assumes a subsidy without a clear funding mechanism.

Power sector operators have echoed NERC’s stance. The Association of Nigerian Electricity Distributors (ANED) and the Association of Power Generation Companies (APGC) both warned that state regulators cannot unilaterally fix tariffs while still depending on the national grid for generation and transmission.

ANED’s Chief Executive Officer, Sunday Oduntan, dismissed the feasibility of delivering 20 hours of electricity daily at ₦160/kWh. He added that since EERC’s announcement, many customers in other states have started resisting payment of electricity bills, expecting similar tariff reductions.

“There is no way a state can set a lower tariff while still relying entirely on federal generation and transmission infrastructure. The subsidy burden must be accounted for, or it creates a debt that will cripple the industry,” Oduntan warned.

Echoing this view, APGC’s Executive Secretary, Joy Ogaji, questioned the legality of the subsidy assumption by EERC, arguing that no formal government directive exists on such subsidy funding. “There is no financing structure backing this claimed subsidy. You cannot regulate a product you don’t produce or pay for,” she said.

EERC, however, defended its decision. Reuben Okoye, its Commissioner for Electricity Market Operations, said the new tariff was based on a comprehensive analysis of MainPower’s operational costs and was aimed at promoting a fair, transparent, and reliable power market in Enugu.

He clarified that the reduction did not affect generation costs or interfere with national power dynamics but was an internal adjustment reflecting local distribution realities.

Despite the clarification, NERC emphasized its ongoing engagement with the Enugu commission to resolve discrepancies and reaffirmed its mandate to ensure the financial stability and integrity of the national electricity market.

As the debate over pricing autonomy and market decentralization continues, experts warn that any policy misalignment between federal and state regulators could pose significant risks to Nigeria’s already fragile power sector.

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This development was revealed at the second Nigerian Electricity Supply Industry (NESI) Stakeholders’ Meeting of 2025, organized by the Nigerian Electricity Regulatory Commission (NERC). Representing the Special Adviser to the President on Energy, Eriye Onagoruwa, a spokesperson confirmed that plans are in motion to resolve the debt before the end of the next quarter.

Onagoruwa acknowledged the weight of the burden GenCos have carried and noted that the Presidency is considering alternative financial mechanisms to deal with the outstanding liabilities, given the federal government’s fiscal limitations.

“We understand the pressure GenCos are under. We’re working with both the Coordinating Minister of the Economy and the Debt Management Office to find workable solutions,” she stated. “The internal approval process is already underway.”

Although no fixed deadline was announced, she expressed confidence that progress would be communicated by the next NESI meeting, signaling a possible update within the next three months.

The GenCos, meanwhile, have been sounding the alarm over what they describe as crippling debts, which some sources say now exceed ₦4 trillion. The Senate Committee on Power recently pointed out that tariff shortfalls have left the government owing an estimated ₦200 billion monthly to electricity producers.

The stakeholders’ meeting brought together key players from across the electricity value chain to discuss pressing issues — from the widening metering gap and the Presidential Metering Initiative, to the potential impacts of the Electricity Act 2023.

Discussions also touched on the proposed Meter Asset Fund, the transition to a multi-tier electricity market, and the newly established State Electricity Regulatory Commissions. In light of these decentralization efforts, John Akinnawo, Acting MD of the Nigerian Bulk Electricity Trading Plc, warned against fragmentation and called for strong policy coordination led by the Nigerian Independent System Operator (NISO).

In a presentation, Abdu Mohammed Bello, NISO’s Managing Director, laid out the agency’s roadmap for enhancing market transparency and operational efficiency.

Industry players at the meeting welcomed the Presidency’s commitment, viewing it as a potential turning point in stabilizing Nigeria’s electricity supply and ensuring long-term sustainability.

As the nation waits for action, the coming months are expected to be pivotal in addressing financial hurdles that have long held back the sector.

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The Nigerian Electricity Regulatory Commission (NERC) has officially approved their exit from the unreliable national grid, granting them licences to independently generate and distribute electricity.

Among the newly approved entities is Nile University in Abuja. Collectively, they are set to generate up to 30 megawatts of electricity under different self-generation arrangements. This bold step is aimed at achieving reliable and uninterrupted power supply, far from the instability of the national grid.

According to NERC’s latest report, Daybreak Power Solutions received an off-grid generation licence with a capacity of 2.63 megawatts. Four other firms secured captive power generation permits totaling 22.50 megawatts. These permits allow companies to produce electricity strictly for internal use.

In the last quarter of 2024, NERC also issued 24 permits for mini-grid projects with a total capacity of 5.5 megawatts. Additionally, five registration certificates were granted for smaller systems below 100 kilowatts. Prado Limited received all 24 permits to set up mini-grids in Benue, Nasarawa, Niger, Ondo, and Kano States. Cross Boundary Energy also secured five permits to distribute power in Kogi State.

To support this independent power infrastructure, NERC certified 18 meter service providers, six installer companies, six manufacturers, three vendors, and three importers. The commission also approved 15 Meter Asset Provider permits during the same period.

This move highlights a growing trend across Nigeria. By September 2024, over 250 manufacturers and academic institutions had abandoned their traditional power distribution companies. These entities, including Dangote Refinery, now generate a combined total of around 6,500 megawatts surpassing the national grid’s struggling output of 5,500 megawatts.

Experts are concerned that this mass departure from the grid could destabilise Nigeria’s already fragile power sector. Minister of Power, Adebayo Adelabu, acknowledged that most bulk electricity users now rely on captive power because of a deep lack of trust in the national grid. He warned, however, that this comes at a steep price. Captive power generation costs between ₦350 and ₦400 per kilowatt-hour for gas systems, and up to ₦1,000 for diesel-powered alternatives.

NERC has attributed this migration to voltage instability within the grid. Spikes, dips, flickers, and brownouts pose significant risks to industrial machinery and often lead to heavy commercial losses. The commission stated that although Nigeria’s grid code mandates a voltage range of 313.50 kV to 346.50 kV, staying within this limit has proven difficult.

The commission continues to work with the Transmission Company of Nigeria and other stakeholders to improve system reliability. However, for many companies, the shift away from the national grid has already begun not out of preference, but necessity.

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The panel plays a crucial role in evaluating and administering amendments to the grid code, ensuring compliance with technical requirements.

During the inauguration, NERC Chairman Sanusi Garba urged members to demonstrate commitment and deliver necessary improvements for national development.

Nigeria’s electricity grid, managed by the Transmission Company of Nigeria (TCN), ensures stable power transmission and distribution across the country.

The National Control Centre (NCC) in Osogbo oversees real-time electricity dispatch, balancing supply with national demand effectively.

The 19-member panel includes representatives from generation companies, TCN, Distribution Companies, and other key electricity market stakeholders.

Their primary responsibility is to assess grid code amendments before presenting them for stakeholder review and final NERC approval.

Meanwhile, the Kogi State Electricity Regulatory Commission (KSERC) has officially assumed electricity market oversight from NERC within the state.

At a handover ceremony in Abuja, NERC Chairman Garba commended KSERC for its commitment to regulatory knowledge acquisition.

NERC has transferred electricity market oversight to 10 states, with full state-level takeovers expected by July 2025.

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The judge specifically granted Falana leave to obtain a writ of mandamus compelling the electricity company to provide detailed information regarding its compliance with the commitment to supplying a minimum of 20 hours of uninterrupted power per day to the Band “A” category of customers.

The judge’s decision followed an urgent ex-parte application filed and argued by a lawyer, Tope Alabi, from Falana & Falana Chambers.

The motion was backed by a 14-paragraph affidavit sworn by a legal officer from the NBA Ikeja, Titilayo Omolasho.

The affidavit stated that in April 2024, Ikeja Electric Plc categorised customers into bands – Bands “A,” “B,” “C,” and “D” – and began implementing these categories immediately, along with corresponding high tariffs.

Omolasho also claimed that Falana was placed in Band “A,” which had a financial implication of N225 per kWh, later reduced to N206.80 per kWh on May 6, 2024.

She also argued that since initiating the Band “A” classification and committing to provide 20 hours of uninterrupted power supply per day, Ikeja Electric has failed to deliver this service.

Omolasho further stated in the affidavit that Falana had requested information from the company in a letter dated May 24, 2024, regarding compliance with the Nigerian Electricity Regulatory Commission (NERC) directive to provide 20 hours of electricity to Band “A” customers.

She claimed that the respondent has since failed, refused or neglected to provide the requested detailed information and has given no reason for this refusal till the time of filing this report

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Aba Power Limited Electric (APLE) has formally applied to the Nigerian Electricity Regulatory Commission (NERC) for an upward review of electricity tariffs across its franchise areas, citing operational challenges driven by rising costs.

During a public hearing held in Abuja on Tuesday, APLE’s Managing Director, Ugo Opiegbe, presented the proposed tariff adjustments for various customer categories. The company plans to increase tariffs for Band A-Non MD from N223.12/kWh in 2024 to N263.08/kWh in 2025 and for Band A-MD1 from N240.09/kWh in 2024 to N283.09/kWh in 2025.

The proposed rates for other bands include:

Band B: N213.74/kWh to N252.03/kWh (Non MD) and N233.13/kWh to N274.89/kWh (MD1)
Band C: N183.59/kWh to N216.47/kWh (Non MD) and N207.06/kWh to N244.15/kWh (MD1)
Band D and E: N148.14/kWh to N174.67/kWh (Non MD)

Rising Costs Driving the Request
Opiegbe attributed the need for the tariff adjustment to significant increases in the cost of generating and distributing electricity. He highlighted the impact of macroeconomic changes, including a sharp rise in wholesale energy costs.

“The cost of generation from the Geometric Power Aba Limited (GPAL) plant has escalated to N133.2/kWh, while the Niger Delta Power Holding Company (NDPHC) increased its invoices to APLE from N21/kWh to N136.26/kWh. This disparity has made it practically impossible for us to sustain operations,” Opiegbe explained.

The proposed tariff review, he added, is essential for recovering costs, maintaining operations, and investing in infrastructure improvements to enhance service delivery.

NERC’s Response
NERC Vice Chairman, Musiliu Oseni, acknowledged the financial strain on electricity distributors but emphasized the importance of balancing consumer interests with operational realities.

“The commission will critically review the parameters behind these proposals to ensure fairness and transparency. The ultimate goal is to create a system where improved service delivery justifies any tariff increases,” Oseni stated.

Oseni also stressed that consumer satisfaction is key, noting, “When customers are happy with the service, they are more willing to pay, which in turn supports the company’s performance and sustainability.”

The hearing underscores NERC’s commitment to fostering an equitable electricity market while addressing the challenges faced by service providers. A final decision on the tariff review will be made following a thorough assessment of APLE’s submissions.

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This decision comes in response to the eighth grid collapse in the past 10 months, the latest of which occurred on Saturday, leaving many Nigerians in darkness.

The most recent incident is the third grid disturbance in just one week, raising serious concerns about the stability of the country’s electricity supply. In a statement posted on its official X handle, NERC expressed its alarm over the ongoing disruptions, warning that the frequent collapses could undo recent advancements in grid infrastructure and stability.

Although significant progress has been made in restoring power, NERC confirmed that electricity was largely restored by 1 PM in 33 states and the Federal Capital Territory.

In line with the Electricity Act 2023, NERC is also in the process of unbundling the System Operator function from the Transmission Company of Nigeria (TCN) in a bid to improve grid management and attract more investment into infrastructure.

NERC stated that the upcoming public hearing will aim to investigate both the immediate and underlying causes of the recurring grid collapses. Details of the hearing will soon be made available in national dailies, and all stakeholders are urged to participate.

Meanwhile, the Transmission Company of Nigeria (TCN) attributed the latest grid collapse to an explosion at the Jebba Transmission Station. According to TCN’s General Manager of Public Affairs, Ndidi Mbah, the blast triggered a temporary disturbance, but power restoration efforts are underway. Engineers at the station have isolated the faulty equipment and reconfigured the busbar arrangement, ensuring the resumption of power supply to affected areas.

This incident marks the third disturbance within a week and adds to the growing number of national grid failures that have plagued Nigeria’s electricity sector. The Federal Government has vowed to investigate the ongoing collapses and find a lasting solution.

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