Nigeria’s Power Sector Attracts $2bn Investment as Liabilities Drop to ₦146bn
Nigeria Records $2bn Power Sector Investment Amid Major Liability Reduction
Nigeria’s power sector reforms have attracted over $2 billion in fresh investment while reducing inherited liabilities to ₦146.76 billion, according to the Federal Government. The update was disclosed by the Minister of Power during the commissioning of the new headquarters of the Nigeria Electricity Liability Management Company (NELMCO) in Abuja on March 26, 2026.
Reforms Drive Investment and Financial Stability
The Federal Government attributed the inflow of over $2 billion in investment to ongoing reforms centred on policy overhaul, market liberalisation, and institutional strengthening. These measures are designed to reposition the electricity sector for sustainability and increased private sector participation.
The reforms are anchored on the Electricity Act 2023, which decentralises the sector and enables subnational governments to participate more actively in electricity generation and distribution.
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Significant Reduction in Sector Liabilities
A key highlight of the reform programme is the sharp decline in sector liabilities. According to government data, liabilities have been reduced from approximately ₦2.303 trillion to ₦146.76 billion through verification, reconciliation, and debt restructuring efforts.
The government also reported savings exceeding ₦700 billion, reflecting improved financial discipline and operational efficiency across the sector.
Revenue Growth and Operational Improvements
The reforms have also translated into improved sector performance. Electricity market revenue increased by about 70% in 2024, signalling enhanced cost recovery and better market dynamics.
On the operational side, generation capacity has risen from 13 gigawatts to 14 gigawatts, with peak generation reaching 5,801.44 megawatts.
Additionally, 16 state electricity markets have been activated, fostering competition and innovation within the decentralised framework.
Metering and Infrastructure Expansion
To address the country’s metering gap, the government is advancing the Presidential Metering Initiative, backed by ₦700 billion mobilised through the Federal Account Allocation Committee and an additional $500 million facility from the World Bank.
The initiative aims to deploy millions of meters nationwide, improving billing transparency and revenue collection efficiency.
Policy Coordination and Sector Governance
As part of broader reforms, the Nigerian Electricity Regulatory Commission (NERC) has also introduced new coordination mechanisms, including a forum for regulators to harmonise market operations and tariff frameworks.
These institutional reforms are expected to strengthen governance, enhance regulatory clarity, and support long-term sector stability.
Outlook
The Federal Government’s reform programme is delivering measurable gains in investment inflows, financial restructuring, and operational performance within Nigeria’s power sector.
However, sustained progress will depend on continued policy consistency, improved gas supply, and infrastructure upgrades. While the reduction in liabilities and increased investment signal positive momentum, addressing longstanding challenges such as transmission constraints and service reliability remains critical to achieving stable electricity supply nationwide.
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