Nigeria’s long-standing electricity crisis is facing a major intervention as the Federal Government moves to raise $2.5 billion (about ₦4 trillion) to stabilise the power sector and address the persistent blackouts that have crippled homes and businesses for years.
The funding initiative is designed to clear outstanding debts owed to power generation companies while financing critical upgrades across the electricity value chain, particularly transmission and distribution infrastructure.
Olu Verheijen, President Bola Tinubu’s Special Adviser on Energy, disclosed this during an interview, revealing that the first tranche of the programme — approximately ₦501 billion — was issued earlier this month at a 17 per cent yield and was fully subscribed.
According to her, subsequent tranches will be released either quarterly or semi-annually, depending on market conditions.
“The programme represents a decisive reset of the electricity market,” Verheijen said.
She explained that a portion of the funds would be used to help electricity distribution companies improve revenue collection by closing the country’s long-standing metering gap, while another portion would be channelled toward upgrading transmission infrastructure.
Nigeria’s transmission network currently evacuates only about 25 per cent of the country’s estimated 13,000 megawatts of available generation capacity. In addition, only about half of grid-connected electricity users are metered.
In an email statement, the government said settling legacy debts in the power sector would help stabilise electricity supply for approximately 12 million registered customers and unlock 4,484 megawatts of stranded generating capacity.
Verheijen also said the government has begun transitioning to a market-reflective tariff system.
“We have commenced a transition to a market-reflective tariff,” she said. “What we are going to do is clear a pathway to a consumption-based tariff framework so that what you pay for is what you consume.”
Nigeria’s electricity crisis
Nigeria’s power sector has remained under severe strain, marked by frequent grid collapses, inadequate generation, ageing infrastructure, and recurring nationwide outages that disrupt economic activity and daily life.
Multiple national grid failures in recent years have eroded investor confidence and left households, businesses, and essential services without reliable electricity for extended periods.
Experts attribute the sector’s instability to limited generation capacity, poor maintenance, deteriorating infrastructure, weak coordination between power generators and distributors, and chronic underinvestment.
As a result, millions of Nigerians depend heavily on petrol and diesel generators, significantly increasing the cost of doing business and placing additional financial pressure on households.
Despite past reforms and intermittent improvements, the grid’s fragility has persisted — underscoring the need for sustained investment and structural reform, which the government says this $2.5 billion intervention is intended to address.
