In the 2025 budget, the Nigerian government, under the administration of President Bola Tinubu, has proposed a significant N751.7 billion investment in the country’s privatised power sector.
This ambitious budget allocation is primarily targeted at improving Nigeria’s power transmission and distribution infrastructure, which includes the procurement of essential equipment such as cables, transformers, and electricity poles.
The Ministry of Power has committed to allocating a substantial portion of the budget for the continued development of the National Electricity Supply Industry (NESI), despite the previous investments not yielding the expected results.
The N751.7 billion will play a crucial role in addressing the sector’s infrastructure deficiencies, contributing to efforts aimed at enhancing electricity access nationwide.
The ministry has also earmarked over N2 trillion for 2025, with a significant focus on tackling power asset vandalism through an N8 billion campaign.
With an allocation of N585 billion to the Power Sector Recovery Operation (PSRO-AF) programme, the government intends to cover part of the funding for the transmission sector.
Additionally, N25 billion will be used to complete priority projects related to the Transmission Company of Nigeria (TCN), ensuring better power distribution across the nation.
The Ministry of Power also plans to distribute N36 billion for transformer installations, cables, and electricity pole replacements.
These projects will span across all six geopolitical zones in Nigeria. Moreover, the “Renewed Hope Light Up Rural Areas” initiative will see the allocation of N30 billion for solar home systems and rural street lighting.
A further N24 billion has been designated for mini-grid projects in federal and state polytechnics.
The Nigerian government continues to explore alternative power solutions, with an N8 billion allocation to maintain existing mini-hydro projects, solar home systems, and mini-grids.
N24.7 billion will be used for installing solar-powered street lights along major highways across the six geopolitical zones, enhancing both safety and visibility.
Despite the ongoing improvements, Nigeria’s electricity sector continues to face challenges in maintaining financial stability.
Nigeria exported over N64.7 billion ($42 million) worth of electricity to neighbouring countries such as Benin, Togo, and Niger in 2024.
However, these international customers have faced ongoing payment delays, further exacerbating the financial strain on Nigeria’s power grid.
Cumulative payments of $39.44 million were made, but several invoices remain unpaid.
In another sector development, the Ajaokuta Steel Company, a special customer category, faces the risk of disconnection due to consistent non-payment of its electricity bills.
As of the third quarter of 2024, the company owed over N1.26 billion to the Nigerian Bulk Electricity Trading Plc (NBET), highlighting the financial challenges in the sector.
The Nigerian government’s continued investment in the power sector, despite previous challenges, underscores the critical need for infrastructure improvements and financial discipline within the sector.
While the proposed N751.7 billion budget allocation is a significant step forward, the government must address longstanding issues such as debt collection, payment indiscipline, and sectoral inefficiencies to ensure sustainable progress.
Leave a Reply