Nigeria continues to grapple with a deep-rooted electricity crisis as less than half of the country’s more than 13,000 megawatts (MW) of installed generation capacity reliably reaches homes and businesses, Joseph Tegbe, the Minister of Power, has said.
Speaking at the Lagos Chamber of Commerce and Industry (LCCI) Renewable Energy Outlook Conference 2026 in Lagos, the minister acknowledged the scale of the challenge facing Africa’s largest economy, warning that inadequate power supply remains a major drag on industrial growth and competitiveness.
“Nigeria’s power sector has, for too long, been a paradox of remarkable natural endowment and underwhelming performance,” Tegbe said. Africa’s largest economy and most populous nation possesses installed generation capacity of over 13,000 megawatts. Yet as of today, less than half of that reliably reaches consumers.”
The admission comes despite years of reforms, billions of dollars in investments, and repeated government promises to improve the electricity supply. For businesses, the consequences have been severe.
According to the minister, manufacturers continue to spend a substantial portion of their operating costs on self-generated electricity, relying heavily on diesel and petrol generators to keep factories and offices running.
“This invisible shadow grid, consuming billions of naira annually in imported fuel, represents a structural tax on Nigerian competitiveness that we can no longer afford to pay,” he said.
The minister noted that energy insecurity is measured not merely in megawatts but in lost productivity, idle factories, cancelled orders and unrealised economic potential.
“No nation has industrialised without first solving its energy equation. Nigeria’s industrial ambition must be powered by reliable, affordable and clean electricity, or it shall remain largely aspirational,” he added.
Grid collapses expose system weaknesses
Tegbe said the nationwide grid disturbances recorded in late 2025 and early 2026, which plunged major commercial centres, including Lagos, Abuja and Port Harcourt into darkness, underscored the fragility of the country’s electricity infrastructure.
“The grid collapses of late 2025 and early 2026 were painful reminders that incremental tinkering is insufficient. What is required, and what this administration is delivering, is systemic transformation,” he said.
To address the problem, the minister highlighted a series of reforms undertaken by the Federal Government since the enactment of the Electricity Act 2023.
He said the legislation has fundamentally altered the governance structure of the power sector by allowing states to generate, transmit, distribute and regulate electricity within their territories.
According to him, about 20 states have already enacted electricity laws, while 12 states, including Enugu, Ekiti, Ondo, Imo, Oyo and Edo, have either adopted or are in the process of taking over electricity market regulation from the Nigerian Electricity Regulatory Commission (NERC).
Transmission upgrades underway
The minister said the government is investing heavily in transmission infrastructure to improve power delivery.
He disclosed that between 2024 and 2025, 82 power transformers were installed, adding more than 8,500MVA in transmission capacity, while over 30 transmission projects were completed nationwide.
These interventions, he said, increased the national grid’s wheeling capacity to approximately 8,700MW.
He also revealed that a $1.16 billion grid digitalisation programme is now 69 percent complete, with more than 3,000 kilometres of fibre-optic cable deployed and over 100 substations upgraded with advanced monitoring systems.
In addition, the Nigerian Independent System Operator (NISO), established in 2025, is expected to improve grid and electricity market operations through greater operational independence.
Energy transition linked to economic growth
Tegbe argued that Nigeria’s energy transition strategy should not be viewed solely through a climate lens but as an economic development agenda designed to boost industrial productivity and reduce energy costs.
He said Nigeria’s Energy Transition Plan projects that moving towards a power system dominated by renewable energy could generate fuel savings of about $121 billion while helping the country achieve net-zero emissions by 2060.
“The additional capital expenditure required, approximately $10 billion annually above business-as-usual, is not a burden to be mourned; it is an investment to be mobilised,” he said.
The plan envisages total installed electricity capacity rising to 277 gigawatts by 2060, with solar energy expected to become the dominant source of power generation.
Private investment gains momentum
The minister said recent reforms have begun attracting significant private capital into the electricity sector.
According to him, more than $2 billion in private-sector investment has flowed into the industry since the implementation of the current reform agenda.
He cited the acquisition of a 60 percent stake in Eko Electricity Distribution Company for $265 million in December 2025 as evidence of growing investor confidence in the sector.
Tegbe further noted that electricity sector revenues almost doubled between 2023 and 2025, rising from approximately N850 billion to over N1.5 trillion following the introduction of cost-reflective tariffs for Band A customers.
“This is evidence that Nigerians will pay for electricity that is reliably delivered, and that a commercially viable sector is achievable,” he said.
Challenges remain
Despite the reforms, the minister acknowledged that significant obstacles remain.
He identified grid instability, a legacy debt burden exceeding N3 trillion, the country’s metering deficit and the complexities of coordinating emerging state electricity markets as key challenges that must still be addressed.
“The old model, centralised, subsidised, structurally insolvent and chronically unreliable, has had its day,” Tegbe said.
“A new model is being constructed: democratised, commercially disciplined, renewable-anchored and industrially focused.”
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