Key Points
- ANED seeks concessional financing to support investment in electricity infrastructure.
- Oduntan identifies policy uncertainty, transmission constraints and weak DisCo finances as major barriers.
- He calls for grid modernisation, smart technologies and stronger private-sector participation.
Main Story
High borrowing costs are making it difficult to secure the long-term financing needed for infrastructure development in Nigeria’s electricity sector, the Association of Nigerian Electricity Distributors (ANED) has said.
ANED Executive Director and Chief Executive Officer, Mr Sunday Oduntan, said commercial lending rates were discouraging investors from committing funds to power-sector projects.
Speaking with the News Agency of Nigeria (NAN) on Tuesday in Abuja, Oduntan called for concessional financing, or “patient capital”, to support investments that require longer periods to generate returns.
He said investors and lenders were often unwilling to provide funds when there was inadequate assurance that their investments could be recovered.
Oduntan also pointed to inconsistent regulatory and government policies as another factor affecting investor confidence and limiting fresh investment in electricity distribution.
He said the sector required broader reforms and stronger commercial discipline to correct structural weaknesses across the electricity value chain.
According to him, the transmission network remains a major constraint and requires urgent investment to improve the volume and reliability of electricity reaching consumers.
He called for increased spending on the national grid, transmission infrastructure and substations, alongside the deployment of smart-grid technologies such as Supervisory Control and Data Acquisition (SCADA).
Oduntan said stronger technical and commercial management of the grid was also necessary and called for protection from political interference.
He further proposed greater private-sector participation in transmission through structured public-private partnership arrangements.
At the distribution level, he identified high technical and commercial losses, inadequate metering and poor service quality as major problems confronting Distribution Companies (DisCos).
He said persistent outages, low voltage and unreliable supply had weakened consumer confidence, while poor revenue collection had reduced the capacity of DisCos to invest in network expansion, maintenance and service improvements.
The Issues
The electricity sector faces investment challenges at both the infrastructure and commercial levels. High borrowing costs make long-term projects more expensive, while policy uncertainty can make investors more reluctant to commit capital.
Weak revenue collection and losses within the distribution segment further limit the ability of DisCos to fund improvements.
What’s Being Said
Oduntan called for a coordinated approach to reforming the electricity value chain, with greater emphasis on commercial discipline, transparent financing arrangements, effective regulation and private-sector investment.
He also advocated grid modernisation, improved system management and greater use of smart-grid technology.
What’s Next
The proposed reforms would require collaboration among government, regulators, investors and electricity companies, particularly in securing affordable financing, upgrading transmission infrastructure and improving distribution operations.
Bottom Line
ANED says Nigeria’s electricity sector needs affordable long-term financing, policy stability and coordinated reforms to attract investment, modernise infrastructure and improve power supply.
