By Anscella Obike
Nigeria’s electricity sector is witnessing a surge of activity as the Federal Executive Council (FEC) approved a massive N6.43 trillion ($4.29 billion) Public-Private Partnership (PPP) investment package designed to strengthen power generation capacity and unlock private capital in critical infrastructure. The sweeping approval cleared within this month reflects renewed confidence in the sector’s reform pathway and a broader government strategy to modernise electricity delivery across the nation.
Under the framework, the FEC cleared three major infrastructure projects, including a 460-megawatt hydropower facility and two deep seaports designed to spur both electricity supply and trade facilitation. This marks one of the largest private investment mobilisations into Nigeria’s energy space in recent years, signalling a strategic pivot from a traditionally government-funded model to one centred on private sector participation and risk sharing.
President Bola Ahmed Tinubu’s Renewed Hope Agenda has emphasised private capital as a key driver of Nigeria’s infrastructural transformation. Senior officials from the Infrastructure Concession Regulatory Commission (ICRC) have said that these approvals will enhance economic competitiveness while addressing chronic gaps in electricity supply, grid reliability, and institutional capacity.
Hydropower & Renewables Step Up
The centrepiece of the package is the planned 460 MW Katsina-Ala Hydropower Plant, a substantial addition to Nigeria’s generation mix that draws on the significant but underutilised potential of the country’s river basins. Once completed, the plant is expected to inject large quantities of reliable, renewable power into the national grid and help stabilise supply for homes and industries alike.
Financiers and policymakers hope that hydropower investment will complement efforts in other sectors of energy generation, including gas and solar, fostering a more diversified energy mix less subject to fuel price volatility or supply disruptions.
Gas Flaring Turned into Power Potential
In another equally promising development, Nigeria has granted permits to 28 companies under the Nigerian Gas Flaring Commercialisation Programme (NGFCP), a key initiative that seeks to end routine gas flaring while capturing wasted gas for productive use. The programme could capture 250-300 million standard cubic feet of gas per day, with the potential to generate up to 3 gigawatts (GW) of electricity.
Officials involved in the NGFCP say the initiative is poised to attract up to $2 billion in investments and create more than 100,000 jobs while supplying cleaner power and reducing environmental emissions. By monetising flare gas, a by-product of oil production that has long been burnt off, Nigeria aims to simultaneously tackle waste, help meet its climate goals, and boost generation capacity.
Industry analysts suggest NGFCP’s success could prove a game-changer for Nigeria’s electricity mix, especially if paired with strategic infrastructure improvements in gas transportation and grid evacuation networks.
Restoration of Generation Capacity
Amid these investment headlines, operational gains are also emerging on the ground. The Niger Delta Power Holding Company (NDPHC) recently announced the successful restoration of 450 MW of generation capacity to the national grid. The increase follows scheduled maintenance at major plants such as Geregu and a series of turbine overhauls across the company’s fleet.
NDPHC officials have highlighted that recovering dormant plant units, including those in Calabar, Omotosho II, Benin, and Sapele, has contributed significantly to the boost in available power. Importantly, the restoration work also includes the preliminary recommissioning of other facilities that had been offline for years, signalling progress in tackling the long-term challenge of underperforming generation assets.
Challenges Remain but Reform Momentum Builds
Despite the positive strides, Nigeria’s power sector continues to confront longstanding structural and financial challenges. Issues such as weak transmission capacity, distribution inefficiencies, and the need for sustained private finance persist. However, the combination of substantial PPP approvals, gas-to-power initiatives, and incremental increases in grid capacity reflects a stronger reform trajectory than seen in recent years.
Energy commentators believe that the acceleration of private investment and operational upgrades could, over time, help to narrow the gap between potential and actual electricity delivery. If these reforms are implemented effectively, they may usher in a more stable, diversified power sector, one capable of better supporting economic growth, industrial productivity, and improved living standards nationwide.