Nigeria Needs $228bn to Fix Power Sector by 2045 — Presidency

Nigeria will require an estimated $228 billion in electricity investments by 2045 to stabilise the national grid, expand power infrastructure and meet the country’s growing energy needs.

The projection translates to an average investment requirement of about $12 billion annually over the period, a figure that starkly contrasts with the approximately $1 billion currently being invested in Nigeria’s electricity sector each year.

The Special Adviser to the President on Power Infrastructure, Sadiq Wanka, disclosed this at Asharami Square 3.0 in Lagos, where he stressed that closing the massive investment gap would require coordinated policy reforms, stronger regulation and a deliberate strategy for attracting both domestic and international capital.

“Nigeria, potentially, needs $12 billion in electricity investments annually through 2045, versus $1 billion being spent currently,” Wanka said.

Generation, Transmission and Distribution Need Billions

Wanka said the required investment would have to be spread across the three major components of the electricity value chain — generation, transmission and distribution.

According to him, approximately $6.1 billion is required for generation, while about $2 billion is needed for transmission infrastructure.

The distribution segment, he added, could require between $2 billion and $4 billion to achieve the level of stability and efficiency required between 2025 and 2045.

The figures underline the scale of the challenge confronting Nigeria, where inadequate generation capacity, transmission constraints, distribution bottlenecks and financial weaknesses have continued to limit reliable electricity supply.

Electricity Act Opens Door to Greater State Participation

Despite the huge funding requirement, Wanka said recent reforms have begun reshaping the power sector and creating opportunities for decentralised investment.

He pointed particularly to the Electricity Act 2023, which has expanded the role of state governments in electricity regulation and opened the door to new categories of licences and greater private-sector participation.

He disclosed that regulatory oversight has already transitioned to subnational regulators in 16 states, potentially giving states greater room to develop electricity solutions suited to their local economies and energy needs.

Wanka cited recent initiatives as evidence of the emerging investment opportunities, including a $200 million public-private partnership announced by the Imo State Government to provide electricity across its local government areas.

He also referenced a N50 billion equity investment by franchise state governments in KEDCO aimed at supporting embedded energy and improving electricity networks.

Government Pushes Cost-Reflective Electricity Market

The Special Adviser also highlighted fiscal reforms designed to reduce the financial pressure on the Federal Government and move the electricity market towards greater commercial sustainability.

According to him, Band A electricity customers have transitioned towards cost-reflective tariffs, a development he said has contributed to an estimated N1 trillion annual reduction in electricity subsidies.

He also argued that the removal of subsidies on petroleum products has improved the economics of alternative power sources compared with self-generation.

Nigeria, he said, is currently importing approximately 1,700MW of solar panels annually, reflecting growing demand for alternative and distributed energy solutions.

Meanwhile, reforms in the oil and gas sector have helped unlock about $10 billion in Final Investment Decisions (FID) for major gas development projects, which could strengthen the fuel supply needed for gas-fired electricity generation.

New Investment Opportunities in Transmission and Hydropower

Wanka said the Federal Government is also pursuing several initiatives aimed at strengthening electricity infrastructure and attracting private capital.

Among them is the Light Up Nigeria pilot in Agbara, designed to improve electricity supply to industrial customers.

He said the Electricity Act has also created room for independent transmission network operators, potentially allowing private investors to participate more directly in the financing and operation of transmission infrastructure.

Another major initiative is the Transmission Infrastructure Fund, which was instituted in the third quarter of 2025 and is targeted for operationalisation in the fourth quarter of 2026.

The Federal Ministry of Power is also working with the Ministry of Water Resources on a fresh concession process for viable hydropower assets.

In addition, the World Bank-backed Sustainable Power and Irrigation Programme is developing a hydropower masterplan aimed at supporting financing for medium- and large-scale hydropower projects across Nigeria.

$23bn Needed to Close Electrification Gap by 2030

Wanka further called for stronger financial mechanisms to accelerate investment in the power sector, noting that Nigeria’s electrification gap could require approximately $23 billion by 2030 to address.

He advocated the establishment of a Power Project Development Fund, the designation of a nodal financial institution for the power sector and the creation of a Power Consumer Assistance Fund.

According to him, these mechanisms would help mobilise financing, de-risk investments and accelerate the development of electricity infrastructure.

He also urged investors to build the wider ecosystem required to develop bankable power projects and attract global pools of capital into Nigeria.

Development partners, he said, should equally support reforms, investment mobilisation and advocacy for a coordinated, Nigeria-led power sector development plan.

The Real Challenge: Turning Reform Into Investment

Nigeria’s power sector is therefore at a critical crossroads.

The country has embarked on regulatory and fiscal reforms designed to decentralise electricity development, increase private-sector participation and reduce the burden of subsidies. But the scale of the required investment remains enormous.

With the sector currently attracting roughly $1 billion annually against a potential requirement of $12 billion, Nigeria must find ways to mobilise significantly more long-term capital if it is to build a reliable electricity system capable of supporting industrialisation, job creation and economic growth.

The message from the Presidency is clear: Nigeria’s power challenge is no longer simply about generating more electricity. It is about mobilising the capital, infrastructure, regulation and investment ecosystem required to deliver reliable power at scale.