KEY POINTS
• The Federal Government has identified generation rehabilitation, productive demand clusters, distribution infrastructure and distributed energy as investment opportunities.
• Power Minister Joseph Tegbe says investors must address constraints such as gas supply, transmission capacity and payment collection to improve electricity delivery.
• Mini grids, commercial solar, energy storage and embedded generation offer opportunities to serve businesses and communities with inadequate power supply.
MAIN STORY
The Federal Government has identified four areas for private investment in Nigeria’s electricity market, including existing power generation, dedicated electricity supply for productive businesses, distribution infrastructure and decentralised energy systems.
The Minister of Power, Mr Joseph Tegbe, outlined the opportunities in a speech delivered on his behalf by the ministry’s Deputy Director of Press and Public Relations, Mr Clement Ezeorah, at the 2026 Energy Conference organised by the Association of Energy Correspondents of Nigeria (NAEC) in Lagos on Thursday.
Tegbe said investment in existing generation assets could improve electricity output through plant rehabilitation, effective maintenance, reliable gas supply and adequate infrastructure to evacuate generated power.
He cautioned investors against expanding generation capacity without first identifying the factors limiting electricity delivery.
“Every proposed intervention should be tested against the binding constraint: fuel, plant condition, transmission, distribution or payment,” he said.
According to the minister, adding generation capacity where other constraints remain unresolved could tie up capital without delivering more electricity to consumers.
He identified industrial estates, ports, agro processing centres and commercial clusters as potential markets for embedded generation and dedicated power supply. Gas producers, he said, could work with developers, distributors and industrial customers to establish integrated gas to power projects.
Distribution infrastructure was another investment area identified by the minister. He listed feeder rehabilitation, substations, transformers, meters and digital revenue systems as opportunities to improve the delivery and commercial performance of electricity distribution.
Tegbe said better metering could strengthen customer confidence and improve energy accounting by helping operators distinguish technical losses from electricity theft and collection problems.
The fourth area covers distributed energy systems, including mini grids, commercial solar installations, energy storage and hybrid power systems. These could serve communities and businesses that receive inadequate electricity from existing infrastructure.
The minister also highlighted productive uses of electricity, such as irrigation, refrigeration and small scale manufacturing, saying these activities could generate sustained demand and help make investments in improved power supply commercially viable.
On the regulatory environment, Tegbe said the Electricity Act 2023 had widened opportunities for state participation and private investment while retaining the need for coordination across the national electricity system.
He described Nigeria’s electricity market as a combination of federal and state jurisdictions, alongside grid connected, embedded, captive and distributed power arrangements. These structures, he said, allow investors to match technologies and commercial models to the needs of particular customers.
Tegbe urged investors to assess the wider economic activity their projects could support rather than focus solely on electricity generation. He added that the government would pursue partnerships with clearly defined responsibilities, realistic milestones and measurable service outcomes.
Earlier, the conference chairman and Group Managing Director of Sahara Power Group, Dr Kola Adesina, said energy assets should generate value beyond ownership.
Adesina said reliable electricity could support manufacturing, logistics and services while expanding economic activity around energy investments. He urged investors to consider both sustainable financial returns and the wider economic benefits their projects could deliver.
The conference was held under the theme, “Access to Assets: Empowering Players and Driving Growth.”
THE ISSUES
- Investment in additional generation capacity will not necessarily improve electricity supply if gas shortages, transmission limitations, distribution weaknesses or payment problems remain unresolved. Identifying the constraint affecting each project is therefore important to determining where capital can deliver the greatest improvement.
- Dedicated power supply for industrial and commercial clusters offers investors identifiable groups of potential customers. However, the commercial viability of these projects will depend on demand, customers’ ability to pay, fuel costs and the infrastructure required to deliver electricity reliably.
- Distribution investments such as transformers, substations and meters address problems between generation and the consumer. Better metering can also improve billing and revenue collection, although the equipment alone will not resolve every technical loss or payment challenge.
- Distributed energy systems provide alternatives for businesses and communities that cannot depend entirely on existing grid supply. Their sustainability will depend on project costs, maintenance, financing and sufficient electricity demand from users.
- Productive uses of electricity can strengthen the business case for power projects by linking supply to economic activity. Irrigation, refrigeration and small scale manufacturing can benefit from reliable electricity, but investors still need to establish whether the expected demand and revenues justify the investment.
WHAT’S BEING SAID
“Every proposed intervention should be tested against the binding constraint: fuel, plant condition, transmission, distribution or payment.” – Joseph Tegbe, Minister of Power
WHAT’S NEXT
Tegbe said the government would pursue partnerships with clear responsibilities, realistic milestones and measurable service outcomes. The supplied material does not specify individual projects, investment commitments or implementation deadlines arising from the conference.
BOTTOM LINE
The government is directing attention towards four areas of power sector investment, from improving existing generation to expanding distributed energy and strengthening electricity distribution. The commercial test will be whether projects address the constraints preventing reliable supply and generate sufficient value for investors and electricity users.
NAN
