Macroeconomic performance⁴

The growing importance of services has bolstered growth in the economy. The sector accounts for about half of GDP, dwarfing the 10% from oil and 22% from agriculture. Real GDP growth was an estimated 1.9% in 2018, reflecting a recovery in services and industry—particularly mining, quarrying, and manufacturing. The recovery benefited from greater availability of foreign exchange. Growth in agriculture was lackluster, due partly to clashes between farmers and herders coupled with flooding in key middle-belt regions and continued insurgency in the northeast. On the macroeconomic front, the delay by parliament in approving the 2018 budget affected implementation and increased fiscal uncertainty by pushing the bulk of spending to the second half of the year. But

thanks to oil revenues, a value added tax on luxury items, and a tax amnesty, the fiscal deficit narrowed in 2018, financed mainly by public debt. By June 2018, the stock of public debt stood at $73.2 billion, up from $71.0 billion in 2017, representing 17.5% of GDP. Despite the increase, Nigeria remained at moderate risk of debt distress. In November 2018, the government issued a Eurobond of $2.9 billion, which reflects its new debt management strategy of prioritizing foreign debt to mitigate the high financing costs of domestic borrowing. Furthermore, relatively strong oil receipts solidified the current account surplus to an estimated 3.7% and bolstered improvements in the terms of trade by about 13% in 2018 alone. Real GDP is projected to grow by 2.3% in 2019 and 2.4% in 2020 as implementation of the Economic Recovery and Growth Plan gains pace. However, the slide in oil prices from late 2018 coupled with an output cut imposed by the Organization of the Petroleum Exporting Countries poses a downside risk to the economic outlook. Parliament’s approval of the 8.83 trillion naira 2019 “budget of continuity” may also be delayed due to presidential elections scheduled for February 2019.

⁴Source: African Economic Outlook, 2019, African Development Bank. Accessible here: https://www.afdb.org/en/knowledge/publications/african-economic-outlook/

Business environment and private sector development⁵

Nigeria is a multi-ethnic and culturally diverse federation which consists of 36 autonomous states and the Federal Capital Territory. With an abundance of natural resources. The country held national elections in 2019, for the sixth consecutive time since its return to democracy in 1999. The incumbent president, Muhammadu Buhari won the elections and was sworn in for a second term on May 29, 2019. He has identified fighting corruption, increasing security, tackling unemployment, diversifying the economy, enhancing climate resilience, and boosting the living standards of Nigerians as main policy priorities his government seeks to continue to pursue in his second term up till 2023. Nigeria’s federated structure gives significant autonomy to states.

Without significant structural policy reforms, Nigeria’s medium-term growth is projected to remain stable around 2%. Given that the economy is expected to grow more slowly than the population, living standards are expected to worsen. Growth is constrained by a weak macroeconomic framework with high persistent inflation, multiple exchange rate windows and forex restrictions, distortionary activities by the central bank, and a lack of revenue-driven fiscal consolidation results. Rising public debt, and increasingly complex policy interventions by the central bank constrain private sector credit growth. External balances are fragile to hot money movements, and fiscal buffers are exhausted, making Nigeria’s economy vulnerable to external risks.

⁵https://www.worldbank.org/en/country/nigeria/overview

Key takeaways on the electricity sector

Electricity Access

In Nigeria, electricity access rate was nearly 60% in 2015 ( 73 million people lack electricity according to the World Bank), with 86% of urban areas and 41% of rural areas with access, while access to non-solid fuels reached only 4%, lack an electricity connection and those connected struggle with multiple technical, commercial and financial challenges – supply shortfalls (resulting from a combination of unreliable generation, distribution load shedding and transmission outages ), underinvestment in T&D infrastructure, unsustainable tariffs (below cost recovery), high losses, poor maintenance and poor financial viability⁶

Table 1:Rural electrification⁷

Installed capacity⁸

Currently with installed capacity of 13GW, the sector supplied an average of 3.1 GWhr/Hr. While it is difficult to a ascertain the supply gap in Nigeria at this time because of lack of data for both distribution assets and self-generation, it is important to observe that the Nigerian Electricity Regulatory Commission (NERC) has issued more than 1300 MW of captive generation licenses (self-generation) and more than 90% of these have been installed. These generators are predominantly powered by diesel/petrol, making Nigeria the biggest diesel/petrol generation market in Africa and showing the enormous amount of suppressed electricity demand estimated at 30,000 MW.
The installed generation capacity in Nigeria is constrained by gas availability, hydrological risk, transmission line capacity constraints and high frequency challenges for the transmission segment – more than 40% of power plants in Nigeria cannot be produce power due to insufficient gas availability (Nesistats, 2019).

Production⁹

Of the approximately 13GW of installed capacity in Nigeria, only 30% is available, of which 78% are thermal and 22% are made up by the hydroelectric dams – the three dams are managed as concessions by the private sector (Figure 2). Independent Power Producers (IPPs) make up 22% of the installed capacity as evidence of the effect of the liberalized power market. The National Integrated Power Project (NIPP) introduced by the FGN was effective as that accounted for 40% of currently installed capacity of 13560MW The 70% (9GW) idle capacity is due to maintenance and faulty units (which accounts for about 50% lack of capacity of the 9 GW). The remaining 50% unavailable capacity is explained by gas and water constraints as well as transmission line constraints due to high frequency of network faults. Lack of efficient Water management is responsible for the largest constraint for the hydro plants accounting for 26% of the constraint in hydro, while the gas shortage accounts for the largest constraints for the thermal plant accounting for 33%.

Table 2¹⁰ Detailed breakdown of plants installed capacity and average availability per site and type of technology, in %:

Production costs¹¹

The wholesale contract price for a gas power plant is in the order of NGN 10,257 (US$ 64.10) /MWh (2013), whereas the wholesale prices for hydropower, wind, solar and biomass range between NGN 25,400 (US$ 158.75) for hydropower and NGN 73,300 (US$ 458.13) / MWh (2013) for solar PV. On the other hand consumers pay DISCOs for the electricity they consume. Here, prices are fixed per region and consumer category. The price to be paid by the end consumer for electricity in Nigeria is therefore not to be confused with the price paid to the GENCO.

Maintenance¹²

Of the approximately 13GW of installed capacity in Nigeria, only 30% is available, of which 78% are thermal and 22% are made up by the hydroelectric dams – the three dams are managed as concessions by the private sector (Figure 2). Independent Power Producers (IPPs) make up 22% of the installed capacity as evidence of the effect of the liberalized power market. The National Integrated Power Project (NIPP) introduced by the FGN was effective as that accounted for 40% of currently installed capacity of 13560MW. The 70% (9GW) idle capacity is due to maintenance and faulty units (which accounts for about 50% lack of capacity of the 9 GW). The remaining 50% unavailable capacity is explained by gas and water constraints as well as transmission line constraints due to high frequency of network faults. Lack of efficient Water management is responsible for the largest constraint for the hydro plants accounting for 26% of the constraint in hydro, while the gas shortage accounts for the largest constraints for the thermal plant accounting for 33%.

Downtime and efficiency

The total installed capacity of the grid-connected generating plants in Nigeria is approximately 13,000 MW, but many plants suffer from recurrent challenges such as maintenance and repair requirements, trips, faults, and leakages, that make them unavailable for evacuation to the national grid. The electricity sector is mainly based on natural gas thermal power plants. Approximately 85% of the grid-connected power plants are fossil fuel (gas) fired, while the remaining15% are hydroelectric power plant¹³

The Performance analysis of Omotoso Power Plant, one of the grid connected power plants, has been carried out with specific emphasis on the two (2) key performance indices: overall Efficiency and thermal Efficiency. For the five (5) Years under review (2008-2012), the study revealed that the average overall efficiency was 29.12% (28.69% minimum {2008}; 29.70% maximum {2012}) as against expected values of 30% - 35% while the thermal efficiency had the average of 28.39% (27.95% minimum {2008}; 28.96% maximum {2012}). The international best practice standards are 60% and above for overall efficiency and 75% and above for thermal efficiency respectively. In each of the evaluated parameters, the plant had lower performance indices than set standards (some considerably low and some others acceptable). A number of reasons were adduced to be responsible for this shortfall in performance. These include: low plant availability due to breakdowns/failures, obsolete technology relative to advancement in the field, instability of the national grid system, ageing of plant components, disruption in gas supply, among others¹⁴

Tariffs¹⁵

Since the privatisation process kicked in, electricity prices have been set centrally by the Nigerian Electricity Regulatory Commission in line with its Multi-Year Tariff Order (MYTO). Within the electricity system, DISCOs pay NBET for the electricity they receive from the GENCOs. NBET then pays the GENCOS for the bulk power sent to the grid. Respective prices are fixed per fuel source. The MYTO methodology combines the positive attributes of regulating the rate of return and a price cap, which changes by region and type of electricity customer. The regulators factor three modules into the calculation: the allowed return on investment (RoI), the allowed return of capital, and efficient operating costs and overheads. Since the costs factored into the prices are assessed individually for power generation, transmission, distribution and retail, rates differ. Worthy of mentioning is the tariff design NERC has implemented for DISCOs. It is intended to ensure that a distinction is made between private, commercial and industrial users in regard to electricity prices, while enabling DISCOs to remain commercially viable. Each DISCO has tariffs reflecting its uniqueness in terms of cost, location and customer profile. The Ministry of Finance has provided a maximum subsidy of NGN 50 billion (US$ 312.5 million) (2012+2013) solely for residential customers. Moreover, NERC has retained a lifeline tariff at NGN 4.00 (US$ 0.025) / kWh for all those consuming below 50 kWh/month. Cross subsidies from large residential (category R), commercial (category C) and industrial (category D) customers to small residential customers are implicit in the tariff design because the Federal Government subsidy is not sufficient.

⁶African Development Bank - Country Diagnostic Note Energy Sector Development in Nigeria
⁷https://data.worldbank.org/indicator/EG.ELC.ACCS.RU.ZS?end=2017&locations=NG&start=1990&view=chart
⁸African Development Bank - Country Diagnostic Note Energy Sector Development in Nigeria
⁹African Development Bank - Country Diagnostic Note Energy Sector Development in Nigeria
¹⁰African Development Bank - Country Diagnostic Note Energy Sector Development in Nigeria
¹¹https://www.giz.de/en/downloads/giz2015-en-nigerian-energy-sector.pdf
¹²African Development Bank - Country Diagnostic Note Energy Sector Development in Nigeria
¹³https://www.get-invest.eu/market-information/nigeria/energy-sector/
¹⁴https://www.omicsonline.org/open-access/performance-evaluation-and-analysis-of-omotoso-power-plant-2016-innigeria-ier-1000134.php?aid=73892
¹⁵https://www.giz.de/en/downloads/giz2015-en-nigerian-energy-sector.pdf

Country strategy on the environment and climate change

Policy and regulation²⁰

On September 12, 2012, the Federal Executive Council (FEC) approved a National Adaptation Strategy and Plan of Action on Climate Change for Nigeria (NASPA-CCN) as a national document for implementing climate change activities in Nigeria. The policy is in line with the United Nations Framework Convention on Climate Change and the Kyoto Protocol. A National Advocacy Campaign on Adaptation in Nigeria (NACAN) was set up to review the national policy on climate change strategy and the NASPA-CCN in detail every five years. The first review of the NASPA-CCN in 2015 will allow Nigeria to incorporate experiences into
the 2015 review of Nigeria’s efforts to achieve the MDGs. Looking further to the future, the ten-year time frame for the second NASPA-CCN review cycle is in line with the timeframe of Nigeria Vision 20:2020. The strategy entails the vision of creating a country in which climate change adaptation is an integrated component of sustainable development, reducing the vulnerability and enhancing the resilience and adaptive capacity of all economic sectors and of all people – particularly women, children, and men who have little resources – to the adverse impacts of climate change, while also capturing the opportunities that arise as a result of climate
change. Its goal is to take action for adapting to climate change by reducing vulnerability to climate change impacts and increasing the resilience and sustainable wellbeing of all Nigerians; and to reduce or minimise risks by improving adaptive capacity, leveraging new opportunities, and facilitating collaboration inside Nigeria and with the global community. The principal aspects under this context are desertification, loss of forest cover, carbon dioxide emissions, water scarcity or other changes in the environment that directly affect the livelihood of people. The climate change policy regards energy resources and connected infrastructure as vulnerable to the impacts of climate change. Since the supply of energy is a service of public interest, any negative change of its availability and quality impedes the development of other sectors and citizens. So-called sustainable energy and also renewable energy is regarded as a one of the measures to reduce risks as regards energy supplies and the pressure on the environment.

National Climate Agency²¹

The FMENV’s dedicated climate change unit has a key role to play in the implementation process and has since the inception of the policy and strategy been devising the relevant programmes

²⁰https://www.giz.de/en/downloads/giz2015-en-nigerian-energy-sector.pdf
²¹https://www.giz.de/en/downloads/giz2015-en-nigerian-energy-sector.pdf

Regional Integration with the West African Power Pool (WAPP)²²

2018 Highlights

In 2018 was marked by the following elements:

• Commissioning of the Ghana-Burkina interconnection in June 2018 via the 225 kV Bolgatanga (Ghana) - Zagtouli (Burkina) line;
• Improvement of the voltage withstand at the 225 kV Ferké substation following the commissioning of the 225 kV Laboa-Boundiali-Ferké line in December 2018. This line will also be used to decongest the 225 kV Taabo-Kossou-Bouaké artery which handles transport to Burkina Faso and Mali
• Since September 2018, energy exported to Burkina has fallen considerably compared to the targeted supply programme. This is due to the fact that the power system of Burkina Faso encounters difficulties to maintain the average transit beyond 60 MW, when 90 MW were targeted.

Figure 4: Nigeria exports, in KWh (Billion)²³

Integration challenges

According to Sédiko Douka, energy commissioner of the Economic Community of West African States (ECOWAS), West African nations face an energy crisis and individual state energy sectors are disadvantaged by local circumstances such as limited access to energy, poorly performing electricity companies, expensive tariffs, while challenges include the need to overcome a reliance on hydrocarbons and the development of renewable sources of energy. More will need to be done if regional progress towards electricity integration (via projects such as the recent commissioning of the Bolgatanga-Ouagadougou interconnection linking ECOWAS members Burkina Faso and Ghana) is to continue in the medium and long term. With access to electricity hovering between 40% and 52% of the population, and brownouts and blackouts averaging about 80 hours a month, the 15 ECOWAS member states need to confront a chronic lack of access to electricity across the region and persistently high prices. A lack of historical infrastructure planning and poor implementation contribute to enduring poverty and have led to an engrained reliance on emergency rental plants, which inflates power costs even more. Complicating the challenge of extending power supply infrastructure is the fact that several of the group's landlocked states, including Niger, Chad, Mali and Burkina Faso, are located in the Sahel region—an arid zone that will experience significant desertification as global temperatures rise over the course of the 21st century, according to forecasts by climate scientists. ECOWAS estimates that more than 75% of the population of member states are already affected at least once every two years by natural phenomena whose effects are becoming increasingly damaging because of climate change.

Clashing imperatives

Besides supporting the mandate for immediate power demand, the role of the West African Power Pool (WAPP) extends to driving long-term climate-proofing strategies recommended under the framework of the Paris Agreement on climate change, which is due to be implemented by 2020. This regional body is mandated to translate overarching public policy guidelines into sectoral investment schemes that favor relatively new green technologies. The schemes include encouraging the installation of diversified sources of renewable energy, creating off-grid generation and storage technologies and nurturing regional power networks and new trading mechanisms. Although these initiatives are complex, require close co-operation between member states and are expensive to implement, they will secure long-term electricity supply security for West Africa if they succeed.
Domestic power utilities are at the forefront of electrification efforts, and their mandates to increase nationwide electricity production frequently lead to conflicts with the WAPP over the type of power generation used. The WAPP is concerned that regional pressure on states to increase electrification could lead to an oversupply of inefficient, fossil fuel-intensive or environmentally damaging generation that relies on coal or hydropower, which would be counterproductive to the WAPP's climate-proofing aims. Indeed, new research by the US National Academy of Sciences suggests that similar large-scale electrification projects in Western countries in the past have had a disastrous long-term effect on the environment . At present, domestic demand in West African countries is often too low to attract investment in such large-scale projects, but this is changing. Several countries are set to increase their reliance on hydrocarbons as a result of developments in the West African basin, especially in Senegal, Ghana, Côte d'Ivoire and Nigeria (the last being an established oil producer). But the countries involved argue that the resulting power generation from these developments will mostly be gas-fired, which would provide significant low-emission generation gains to the power market.

Figure 5: West Africa’s energy situation

Network integration

If the installation of new power generation capacity remains largely a domestic state-based prerogative, the integration of existing networks is firmly in the WAPP's remit. The continued involvement of third-party donors and financial institutions such as the African Development Bank and the World Bank is likely to ensure that the focus on regional integration remains at the forefront of electricity stakeholders' concerns. In 2016, with the African Development Bank’s help, the WAPP accelerated the construction of a 330 kV double circuit high voltage transmission line from Erukan (Nigeria) to Sakete (Benin) and help meet the needs of the ECOWAS region in suppling reliable electricity supply at affordable cost. The Project, a WAPP key priority, will ensure stable integration of the national electricity networks in the ECOWAS Region and facilitate the accessibility to economic energy resources to all member states of the region. The realisation of this 330 kV WAPP Nigeria–Benin Project will facilitate optimal power exchanges and trading between the Member States. It seeks to establish a robust transmission link from Côte d’Ivoire to Nigeria passing through Prestea, Aboadze, Volta in Ghana, Lomé in Togo, and Sakete in Benin. In 2017, with the World Bank's help, the WAPP launched a regional off-grid electrification project which aims to increase access to electricity in rural areas through innovative solar power solutions, and a regional electricity trading market, which was launched in July 2018. A number of transmission interconnections have already been completed or are under way, such as the 225-kV exchange line between Burkina Faso and Ghana, a 225-kV transmission project linking Côte d'Ivoire, Liberia, Sierra Leone and Guinea and the OMVG interconnector, which will link Senegal, Gambia, Guinea-Bissau and Guinea. It is estimated that the entire region will be connected by the start of the next decade.

Regional electricity market

Assuming that regional states can overcome the obstacles identified earlier, the integration of West Africa's growing power-generating capabilities could create the region's first true power market. Currently, only about 7% of the electricity produced in West Africa is traded. However, in July 2018 the WAPP launched a trading market (with its headquarters in Cotonou, Benin) that will allow ECOWAS member states to trade their surplus electricity. The World Bank estimates that an integrated power-trading system in the region could bring operational and power-generation cost savings of USD 5bn-8bn a year by allowing countries to import cheaper and more cleanly generated electricity. However, the potential new market throws up several complex political and technical challenges, which will require close cooperation and determination among policymakers, regulators and utilities if they are to work. Throughout much of the region, local power utilities are expected to hinder the conclusion of trading agreements, and low capitalization, ongoing supply problems, poor domestic collection capacity and corruption are likely to result in poor collection of payments, making it difficult to enforce international contracts. Such problems have already been reported in pre-existing projects operating on a smaller scale, such as the West African gas pipeline system linking Nigeria, Benin, Togo and Ghana. After force majeure was declared on the supply of gas by Nigeria at the start of the project in 2011, the pipeline underperformed and the Ghanaian authorities consequently underpaid for supply. The WAPP will need to instigate measures to improve the power sector's creditworthiness, provide guarantees and involve regional institutions, if it is to take the lead in ensuring that the region's electricity infrastructure stands a chance of succeeding, once it is built.

²²Source : African Development Bank Analysis; The Economist Intelligence Unit, December 2018
²³https://knoema.com/atlas/Nigeria/topics/Energy/Electricity/Electricity-exports
²⁴Source: Electricity from renewable resources – Status, Prospects and Impediments, The National Academies of Sciences, Engineering and Medicine, 2010. Accessible here: https://www.nap.edu/catalog/12619/electricity-from-renewable-resources-status-prospects-and-impediments

Electricity Regulatory Index²⁷

Regulatory assessment

The Electricity Regulatory Index for Africa (ERI) is a flagship publication of the Power, Energy, Climate Change and Green Growth Complex of the African Development Bank, which seeks to empirically evaluate the performance of African utility regulators, benchmark their performance against international best practices as well as a peer-to-peer comparison of their performance.

Independence

Nigeria and Tanzania recorded high scores for independence partly because of the provisions in their respective regulatory acts/laws prohibiting commissioners from accepting a job in the regulated utility after their term of office. In the case of Nigeria, the period is two years, while in Tanzania the prohibition covers the director-general, as well as employees of the authority, for a period of eighteen months after the expiration or termination of the term of office or service with the authority.

Predictability

South Africa and Lesotho recorded the highest scores while Togo recorded the lowest. Kenya, Uganda, Nigeria, Namibia, Malawi, Senegal and Ghana all recorded scores with high level of development. The scores reinforce the survey results whereby 86% of the regulators adopted a consultative approach with stakeholders when changing their tariff methodologies. In the case of Lesotho and South Africa, these regulators changed other major documents such as licenses, contracts, authorizations by mutual agreement with the parties involved.

Regulatory Substance Index

Out of the regulators surveyed, 20% of the scores fell in the zone with high level of development and 27% in the well-developed zone, while 47% and 6% were in the average level of development and low level of development zones, respectively. The best performers were Namibia, Nigeria and Uganda. Senegal, Tanzania, Kenya and South Africa also performed above average. Gambia was the lowest performer and fell in the low level of development zone.

Licensing Framework

With respect to the licensing framework, 33% of regulators fell in the high level of development zone, 20% in the Average level of development zone, 14% in the well developed zone and 33% in the low level of development zone. The combined percentage of 53% of scores in the average and low level of development range zones is an indication that regulators generally perform below average on licensing frameworks. The best performers include Nigeria, Namibia, Uganda, Tanzania and Lesotho because these countries have developed a separate licensing framework for large grid-connected systems and a simplified licensing framework for off-grid systems.

Regulatory Outcome Index

The top five performers were Ghana, Uganda, Namibia, Malawi and Tanzania. This implies that in these countries, the regulators’ actions and decisions had a positive influence on the utilities’ performance. The countries in which regulatory impact could be described as above average include Togo, Nigeria, Cameroon, Cote d’Ivoire, South Africa and Kenya. For countries such as Zimbabwe, Gambia, Senegal and Lesotho, the regulatory impact on the utilities was just average.

Electricity Regulatory Index

13% recorded ERI scores are in the well developed zone, 67% in the average zone, while 20% were in the low developed zone. Three of the high performers, namely Uganda, Namibia and Tanzania, had their ERIGS scores adjusted upwards owing to the impact of the ROI. This resulted in Tanzania overtaking Nigeria in the final ERI rankings. The implication of this result is that the impact of the regulator’s actions and decisions for Uganda, Namibia and Tanzania, as viewed from the utilities’ perspective, seemed to have had a more positive impact on the performance of utilities than in Nigeria.

Regulatory Governance

The results from the survey showed that most regulators in Africa were established by law and therefore possess a legal mandate. Sixty-seven percent (67%) were established by an electricity sector law and/the regulators. In the case of Togo, the regulator was established under law and backed by a presidential decree. In the case of Cote d’Ivoire, an electricity sector law established the regulator; however, there was no regulatory act. It is important to also highlight that in some of the countries surveyed, the electricity and regulatory laws are embedded in one document or law. Examples of countries with this feature are Namibia and Nigeria. Under the Nigeria Electricity Power Sector Reform Act, for any person who holds the office of Commissioner, for a period of two years after he/she ceases to be a Commissioner, he/she shall not acquire, hold, maintain any interest, office, employment or consultancy arrangement in the regulated utilities in Nigeria. If such a person acquires any such interest involuntarily or by way of succession, he/she shall divest him/herself from such interest within a period of three months of such interest being acquired.

²⁷https://www.afdb.org/fileadmin/uploads/afdb/Documents/Generic-Documents/Electricity_Regulatory_Index_2018.pdf

National utility

There are 11 Electricity Distribution Companies (DisCos) in Nigeria. The coverage areas of the 11 companies are indicated in the map below:²⁸ The DisCos provide electricity to consumers ( Industrial , Commercial and Residencial) and the conusmers make direct payments to the DisCos.

Niger Delta Power Holdings Company (NDPHC) is a limited liability company to serve as the legal vehicle to hold the NIPP assets using private sector-orientated best business practices. There are several IPPs GenCos (Generating companies). And a number of generating assets owned by the government have been privatized

Table 9: Nigeria Discos covering regions²⁹

Policy and strategy³⁰

• Electric Power Sector Reform Act of 2005 – to institutionalize the legal frameworks for reforming the Nigerian Electricity Supply Industry (NESI) from the vertically integrated government owned entity to a privatized sustainable and competitive electricity Market that will attract private sector investments
• Rural Electrification Policy, 2009
• Roadmap for Power sector Reforms 2010
• National Renewable Energy and Energy Efficiency Policy, 2015 – seeks to increase the share of renewable energy in the total energy mix to 30% by 2030
• National Energy Action Plan within the framework of the Sustainable Energy for All (SE4ALL) 2016

Figure 8: Key Transport and Distribution Networks³¹

Transport and distribution networks³²

²⁸https://nerc.gov.ng/index.php/contact/discos
²⁹https://nerc.gov.ng/index.php/contact/discos
³⁰https://www.afdb.org/fileadmin/uploads/afdb/Documents/Generic-Documents/AEMP/AEMP_-_Nigeria_Government_presentation.pdf
³¹Sources: African Development Bank - Country Diagnostic Note Energy Sector Development in Nigeria ³²Sources: African Development Bank - Country Diagnostic Note Energy Sector Development in Nigeria

Mapping of ongoing programmes and projects

Donors interventions:³³

• African Development Bank - Funding for Transmission Expansion Projects to build 330kV and 132kV transmission lines and substations across the country
• World Bank - Funding for Nigerian Electricity Transmission Access Project to support rehabilitation and reinforcement of existing lines and substations.
• JICA - Funding for Transmission Infrastructure Projects in Lagos and Ogun States to support construction of 330kV and 132kV transmission lines and substations
• AFD - Funding for Abuja Ring Scheme to support construction of 330kV and 132kV line and substations to reinforce and stabilize power supply in the Federal Capital Territory and environs.
• AFD/EU - Funding for Northern Corridor Transmission Project to support construction of new lines and reconstruction of some existing lines.
• GIZ/EU - Technical support towards development / integration of renewable energy into energy mix of the country
• World Bank - Funding for Transmission infrastructure rehabilitation and expansion project to support rehabilitation and expansion of 330kV and 132kV substations rehabilitation and expansion.
• Central Bank of Nigeria - CBN_NESI Stabilization Facility
• Central Bank of Nigeria - Payment Assurance Facility to NBET
• World Bank - Rural Electrification facility to REA

Focus Projects and Programs across the power spectrum³⁴

• Producing electricity from Thermal sources
  240 MW ATFP/Afam Power Plant, Rivers State
• Producing electricity from the sun and wind and Gas
  10 MW Katsina Wind Farm
  106 MW Gelegele, Edo State
  50 MW Obotobo, Forcados, Delta State
• Developing hydroelectric plants:
  360 MW Gurara II Hydropower Project
• Programmes
  Distribution Expansion Programme - 2,000MW evacuation capacity

³³https://www.afdb.org/fileadmin/uploads/afdb/Documents/Generic-Documents/AEMP/AEMP_-_Nigeria_Government_presentation.pdf
³⁴https://www.afdb.org/fileadmin/uploads/afdb/Documents/Generic-Documents/AEMP/AEMP_-_Nigeria_Government_presentation.pdf

Investment opportunities for the private sector³⁵

Nigeria has enormous and largely untapped natural energy resources: the 4th largest producer of gas in the world with gas reserves of 5.15 trillion cu m , the solar irradiation in Nigeria ranges from 2200kWh/M2 in the North to 1750kWh/M2 in the south; all in a vast area of uncultivated land with greater portion of Sahara desert capable of generating 5000 megawatt of electricity via solar solution. The wind gust in Nigeria ranges from 4m/s to 6 m/s with the maximum observed in 60% land mass and Nigeria produces enough biomass annually but it is grossly unutilized.

Nigeria has two major rivers - River Niger and River Benue with a total exploitable potential of hydropower is estimated at over 14,120 MW . River Niger has been partially utilized to generate about 1900 MW of electricity using three Hydroelectric dams – Kainji, Jebba and Shiroro. No dams exist on the River Benue yet despite the feasibility studies carried out more than 10 years ago which has shown the potential to generate a little above 3000 MW from the Mambilla region of this river. However, there are already 20 medium sized dams in the north of the country where solar irradiation is high and which will allow the Government to focus on the much sought after Solar and Hydro hybrid model of power generation which will also increase the energy quota from renewable and reduce the constraint in transmission of power.

Additional investments required to meet renewable energy targets³⁶

The long term vision and goals of the Nigerian government includes Investment of US$ 3.2B per annum in Generation and Transmission projects. In terms of generation which also includes renewable energy projects 10 GW increase in generation capacity I expected by 2020 and a further 15 GW increase in generation capacity from 2021 to 2025

Figure 6 Required investments to reach the target of renewable energy by 2030

To Be Completed

Sample sources of concessional funding

• African Development Bank financing solutions: https://www.afdb.org/en/projects-and-operations/financial-products/
• A list of available sources are available here: https://www.get-invest.eu/funding-database/?_search=1
• Africa Renewable Energy Fund (AREF): https://www.gogla.org/africa-renewable-energy-fund-aref
• Africa Power Platform: http://www.africanpowerplatform.org/financing/grants.html
• Seed Capital Assistance Facility (SCAF): https://www.scaf-energy.org/
• Energy access Africa: https://energyaccess-africa.com/2016/10/10/funds-available-for-energy-access-companies-and-projects-in-africa/
• Energy Africa Infrastructure Fund: https://energyaccess-africa.com/2016/10/10/funds-available-for-energy-access-companies-and-projects-in-africa/
• IRENA/ ADFD: https://www.irena.org/ADFD/Project-Facility/Funding-Offer

³⁵Sources: African Development Bank - Country Diagnostic Note Energy Sector Development in Nigeria
³⁶https://www.afdb.org/fileadmin/uploads/afdb/Documents/Generic-Documents/AEMP/AEMP_-_Nigeria_Government_presentation.pdf

Contact information of local donor representations

About opportunities in the country

⁴⁰https://eandt.theiet.org/content/articles/2019/02/off-the-grid-thinking-to-end-nigeria-s-blackouts/
⁴¹https://www.get-invest.eu/market-information/nigeria/energy-sector/
⁴²https://www.afdb.org/fileadmin/uploads/afdb/Documents/Generic-Documents/AEMP/AEMP_-_Nigeria_Government_presentation.pdf
⁴³https://www.afdb.org/fileadmin/uploads/afdb/Documents/Generic-Documents/AEMP/AEMP_-_Nigeria_Government_presentation.pdf
⁴⁴https://www.afdb.org/fileadmin/uploads/afdb/Documents/Generic-Documents/AEMP/AEMP_-_Nigeria_Government_presentation.pdf

About private sector participation

⁴⁵https://www2.deloitte.com/content/dam/Deloitte/ng/Documents/strategy/ng_Invest%20in%20Nigeria_Country%20Report_July18%20.pdf