MAN launches programme to cut manufacturers’ energy costs through structured financing

KEY POINTS

• MAN has unveiled an industrial energy cost reduction programme to help manufacturers finance more affordable and reliable power solutions.
• The initiative will support factory rooftop solar, battery storage, captive natural gas and smart energy management systems.
• Manufacturers reportedly spent N1.35tn on alternative power generation in 2025, up from N1.11tn in 2024.
• A pilot project in the South-East is proposing a 1.5-megawatt energy solution with projected savings of more than 50 per cent.
• The Federal Government says it is prioritising industrial energy corridors, infrastructure investment and improvements to electricity supply.

MAIN STORY

The Manufacturers Association of Nigeria (MAN) has introduced an industrial energy cost reduction programme aimed at helping factories access more affordable and reliable electricity through structured financing, as rising power costs continue to put pressure on manufacturers’ profits and production capacity.

MAN President, Dr Ifeanyi Okoye, announced the initiative on Tuesday at the 2026 Manufacturers Energy Security and Energy Efficiency Summit in Lagos. The summit was organised by Manufacturers Power Development Company Ltd. (MPDCL), alongside GIZ and the Nigerian Energy Support Programme (NESP).

The programme will promote factory rooftop solar installations, battery energy storage systems, captive natural gas solutions and smart energy management networks. Its financing structure is intended to help manufacturers adopt these technologies without relying solely on expensive, short-term commercial bank loans.

Okoye said manufacturers currently spend about 40 per cent of their profits addressing energy challenges. He argued that high electricity tariffs, unreliable grid supply and dependence on fossil fuels were undermining industrial production and competitiveness.

He said the initiative would connect manufacturers with long-term financing instruments, climate funds, green investments and asset-financing arrangements to support the transition to more efficient energy systems.

THE ISSUES

The scale of manufacturers’ energy burden was further highlighted by John Aluya, Chairman of the Board of Directors of MPDCL, who said energy costs accounted for more than 40 per cent of manufacturers’ operating expenditure.

He said the high cost of generating electricity independently had reduced profit margins and weakened the ability of local industries to compete. The proposed programme will therefore explore solar photovoltaic systems, battery storage, captive gas power, energy efficiency and carbon credit monetisation.

The financial pressure is also reflected in figures presented by Dr Adaora Chukwudozie, Regional Chairman of MAN’s Anambra, Ebonyi and Enugu Branch. She said manufacturers spent about N1.11tn on alternative power generation in 2024, with the figure rising to approximately N1.35tn in 2025.

That spending means manufacturers are effectively financing a second electricity system alongside the national grid. Chukwudozie said the money diverted to alternative power could otherwise have supported raw material purchases, machinery, salaries and business expansion.

She also highlighted a proposed 1.5-megawatt pilot energy solution in the South-East, which is projected to deliver savings of more than 50 per cent. Under the proposed financing structure, the manufacturer would access the energy infrastructure without providing the initial capital investment, allowing it to preserve working capital for production.

The project would include smart metering, remote monitoring and energy dashboards to track consumption, generation and actual savings. Chukwudozie said the model could be expanded across MAN branches to aggregate energy demand, attract investors and achieve economies of scale.

However, she stressed that measurable savings and verifiable operating performance would be necessary to demonstrate the project’s viability and encourage wider adoption by manufacturers and financiers.

WHAT’S BEING SAID

“Manufacturers cannot finance modern industrial energy transitions with short-term commercial bank loans carrying high interest rates.” – Dr Ifeanyi Okoye, President, Manufacturers Association of Nigeria.

“Today, we are moving beyond advocacy into implementation. This flagship initiative is designed to hand the power back to the manufacturer, literally and figuratively.” – Dr Ifeanyi Okoye, President, Manufacturers Association of Nigeria.

WHAT’S NEXT

Responding to manufacturers’ concerns, Minister of Power Joseph Tegbe said the Federal Government was directing investments towards addressing infrastructure gaps, improving electricity supply and strengthening the power sector.

He said unreliable electricity increased manufacturers’ cost of capital, diverted working capital into diesel and other alternative sources, disrupted production schedules and reduced machinery utilisation.

Tegbe outlined a four-pronged government roadmap covering grid standardisation, sector liquidity and sustainability, asset optimisation, and expansion of electricity infrastructure. He added that the ministry was conducting a technical audit of the power sector to identify infrastructure gaps and prioritise investments according to actual needs.

Lagos has been identified as the first major energy corridor under the initiative because of its significant share of national electricity demand. The government plans to develop additional corridors for other major industrial and commercial centres. Tegbe also said the ministry was working to improve gas supply to power plants, expand renewable energy deployment and optimise existing generation and transmission assets.

On the regulatory side, the Nigerian Electricity Regulatory Commission (NERC) said it was engaging distribution companies to prioritise reliable supply to industrial customers. Its chairman, Dr Musiliu Oseni, represented by Director of Economic Regulation, Agba Terab, said the commission was also working with stakeholders on industrial supply corridors, network investment and battery-enabled storage.

Oseni added that NERC’s net billing framework would allow eligible renewable energy customers to export surplus electricity to distribution networks and receive credits under transparent regulatory arrangements. The framework is intended to improve the financial case for industrial renewable energy investments by allowing manufacturers to earn value from electricity their facilities generate beyond their immediate needs.

He said regulatory certainty and transparent compensation mechanisms would be important in attracting private investment into distributed generation and green financing.

BOTTOM LINE

MAN’s programme seeks to address one of the major costs weighing on Nigerian manufacturing by helping factories finance alternative and more efficient energy systems. Its success will depend on whether manufacturers can access affordable long-term financing and achieve savings that are measurable enough to justify investment. Government infrastructure improvements and clear regulatory arrangements will also be important to making these solutions commercially viable at scale.