Power sector reforms attract $2 billion in fresh investment, revenue grows 70%, says Minister Adelabu

KEY POINTS

• The Minister of Power, Mr. Adebayo Adelabu, announced that ongoing reforms have attracted over $2 billion in fresh investments into Nigeria’s electricity industry.
• Revenue within the sector grew by 70% in 2024, while government liabilities were slashed by approximately ₦700 billion, signaling improved cost recovery.
• National grid generation capacity has increased from 13GW to 14GW, reaching a record operational peak of 5,801.44 MW.
• The Nigeria Electricity Liability Management Company (NELMCO) has successfully reduced inherited sector liabilities from ₦2.3 trillion to ₦146.76 billion.

MAIN STORY

Nigeria’s power sector is undergoing a massive financial and structural “sync,” according to Minister of Power Adebayo Adelabu.

Speaking in Abuja on Thursday during the commissioning of the new NELMCO headquarters, the minister detailed how the Electricity Act 2023 has effectively decentralized the industry.

This shift has already activated 16 state electricity markets, breaking the federal monopoly and inviting sub-national competition for the first time in decades.

The reforms are not just structural but technical. Nigeria recently completed a successful four-hour synchronization test of its national grid with other ECOWAS countries, signaling readiness for a regional power exchange.

On the domestic front, the Presidential Metering Initiative is tackling the metering gap with ₦700 billion in local funding and an additional $500 million World Bank facility.

 These efforts, combined with NELMCO’s aggressive debt reconciliation—which saw ground rent claims drop from ₦644 billion to just ₦41.8 billion—are repositioning the sector as a commercially viable market rather than a subsidized drain on the national treasury.

THE ISSUE

The primary challenge addressed by these reforms is the “Liquidity and Liability Trap.” For years, the sector was choked by trillions in “inherited debt” and a “Collection Gap” where generated power didn’t translate into revenue. This “Financial Static” discouraged private investors.

By utilizing NELMCO to “clean the books” and implementing the first National Integrated Electricity Policy in 20 years, the government is attempting to create “Investor Clarity.” The goal is to ensure that every kilowatt generated is accounted for, paid for, and reinvested into the aging infrastructure.

WHAT’S BEING SAID

• “The sector’s revenue grew by 70 per cent in 2024… reflecting improved efficiency and cost recovery mechanisms,” stated Minister Adebayo Adelabu.
• “The Electricity Act 2023 has enabled the decentralisation of the sector and opened the door for sub-national participation,” Adelabu added regarding policy shifts.
• “NELMCO has reduced inherited liabilities from ₦2.303 trillion to ₦146.76 billion,” the Minister noted, highlighting the agency’s impact.
• “Nigeria has successfully carried out the synchronisation of its national grid with those of other ECOWAS countries,” he concluded, marking a technical milestone.

WHAT’S NEXT

• In the coming months, the Presidential Metering Initiative will begin the mass procurement and rollout of millions of meters to bridge the gap for residential and commercial consumers.
• The 16 newly activated state electricity markets are expected to begin licensing their own independent power projects (IPPs) and distribution frameworks.
• Furthermore, the government will finalize the regional power exchange protocols with ECOWAS partners following the successful synchronization test.
• Finally, NELMCO will continue its verification exercise to settle the remaining ₦146.76 billion in liabilities, aiming for a “near-zero” debt profile for the sector by year-end.

BOTTOM LINE

The bottom line is that Nigeria’s power sector is finally “paying its way.” By clearing nearly ₦2 trillion in debt and attracting $2 billion in new capital, the government is moving away from emergency bailouts toward a market-driven reality. For the average Nigerian, the shift from 13GW to 14GW and the record peak generation suggest that while the “dark days” aren’t entirely over, the grid is becoming more stable and scalable than ever before.

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