Nigeria aims to attract investors into its struggling power sector by offering higher tariffs, while providing fresh electricity subsidies to help shield households from the extra cost.
According to Bloomberg Nigerians will get a subsidized 50 kilowatt hours per month, either through consumption or via vouchers, the West African nation said in a pitch to investors at a World Bank energy summit in Tanzania.
It seeks $15 billion from private investors to plug an estimated $23 billion hole that the government said is needed to revive its moribund power sector. This will help provide electricity to 86 million people in Africa’s most populous nation currently without power, according to the presentation.
Despite abundant gas reserves, hydro capabilities and plentiful sunlight, Nigeria generates roughly 13,000 megawatts of electricity for its more that 200 million people. That has led to frequent blackouts and a reliance on private generators for those who can afford them.
In contrast, South Africa — with a population that’s almost a third the size of Nigeria’s — has about 52,000 megawatts of capacity.
Nigeria’s plan will see it commit to raising the renewable energy share in its generation mix from 22% to 50% over five years and more than doubling the number of households connected to the grid per year, the presentation showed.
Read also: Energy-starved Nigeria flares most gas in four years
It will also implement a tariff plan that reflects the full cost of electricity production by no later than 2027, with a buffer for vulnerable households.
Despite removing electricity subsidies for around 15% of mostly urban households last year – a move that saw tariffs triple — the nation still spent an estimated 2.2 trillion naira on subsidies.
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