Nigeria’s electricity generation has continued to hover around an average of 4,500 megawatts despite the country securing loans totalling over $3.23bn in about four years from international financial institutions.

Global institutions such as the World Bank, the African Development Bank, and the Japan International Cooperation Agency have supported the power sector with billions of dollars in loans, but many parts of Nigeria still suffer incessant blackouts.

These funds were approved to finance various projects to address the country’s electricity challenges and improve access to reliable power supply.

However, power generation in the country has persistently hovered around 4,500MW for a population of over 200 million people.

The daily power report obtained by one of our correspondents on Thursday, for instance, showed peak generation reached 4,743MW as of 6 am on Thursday.

However, the average power generation in the past three years has remained at 4,500MW despite efforts by the government.

Since 2020, the World Bank has approved multiple loans to Nigeria’s power sector, focusing on sustainable energy solutions, distribution system upgrades, and overall sector reform.

The Sustainable Power and Irrigation for Nigeria Project, with a principal amount of $500m, was signed in September 2024 to enhance energy reliability and agricultural productivity.

In December 2023, the World Bank signed agreements for the Nigeria Distributed Access through Renewable Energy Scale-up Project, totalling $750m across three International Development Association credits.

This project is expected to expand renewable energy access and distributed electricity solutions.

In June 2023, the World Bank approved $1.5bn for the Power Sector Recovery Performance-Based Operation, which includes $301m already effective, $449m currently disbursing, and $750m from 2020, of which $715m has been disbursed.

This programme was designed to improve financial sustainability and operational efficiency within the power sector.

Also, the Nigeria Distribution Sector Recovery Programme, with $500m approved in February 2021, aims to support the capital and technical needs of electricity distribution companies.

On July 31, 2024, the African Development Bank Group approved a loan of $500m to the Federal Republic of Nigeria to help transform the country’s electricity infrastructure and improve access to cleaner energy sources.

According to a statement from the AfDB, this funding will finance the first phase of the Economic Governance and Energy Transition Support Programme, aimed at transforming the country’s electricity infrastructure and improving access to cleaner energy sources.

The statement also noted that the loan will help close the financing gap in the Federal Budget for the 2024/25 fiscal year, specifically supporting the implementation of Nigeria’s new Electricity Act and the Nigeria Energy Transition Plan.

These initiatives are designed to decentralise the electricity supply industry and attract investments from subnational governments and the private sector.

In September 2022, the Federal Government said it would partner with the Japan International Cooperation Agency to implement a $200m electricity transmission expansion programme in Lagos and Ogun states.

The former Minister of Power, Abubakar Aliyu, had said the aim of the programme was to expand the transmission network in the identified states so as to effectively support industries in the South-West.

However, there have been some challenges around the implementation of a number of the projects linked to the loans.

The PUNCH earlier reported that the $500m Nigeria Distribution Sector Recovery Programme, aimed at addressing significant challenges in the country’s electricity distribution sector, was hit by several delays.

A World Bank document on the restructuring of the project, obtained by The PUNCH on Monday, indicated that these delays, primarily due to a court case filed by the Association of Meter Manufacturers of Nigeria and a slow approval from the National Assembly, have threatened the timely implementation of the project.

The DISREP, approved by the World Bank in February 2021, is designed to improve the financial and technical performance of Nigeria’s electricity distribution companies.

The programme is a hybrid one, combining a Programme-for-Results component valued at $345m, with an Investment Project Financing component of $155m.

The funding aims to enhance Nigeria’s electricity sector by improving Discos’ performance, addressing the metering gap, rehabilitating distribution infrastructure, and strengthening governance.

However, the implementation of the project has been delayed due to a few factors, including a legal challenge that impacted the procurement of smart meters.

With the challenges in the sector, power generation in Nigeria has not improved, and the country continues to experience erratic electricity supply and frequent national grid collapses, with over 100 incidents recorded in the past decade.

Nigeria has been battling epileptic power supply, affecting the productivity of small businesses and manufacturers. This challenge is exacerbated by the frequent collapse of the national grid, with a total of 12 breakdowns recorded in 2024.

These challenges, compounded by infrastructure deficiencies and delays in implementing critical reforms, have raised questions about the effective utilisation of these funds.

To resolve recurring issues, the Minister of Power, Adelabu Adebayo, revealed that Nigeria requires at least $10bn over the next 10 years to achieve 24-hour power supply across the country.

However, several underlying factors have hindered the presidential goal to generate 6,000MW this year.

The government has pledged to address these inefficiencies and ensure that the loans yield the intended results.

The PUNCH earlier reported that the Ministry of Power plans to allocate a significant portion of its N1.2tn 2025 budget towards financing a range of multilateral and bilateral loan projects to enhance electricity generation and distribution nationwide.

Stakeholders within the power sector have emphasised the need for transparency and accountability in managing these resources to achieve tangible improvements in electricity generation.

However, as of now, the stagnation in power output persists, leaving many Nigerians to contend with unreliable power supply despite the substantial financial inflows in the sector.

Recall that Adelabu had promised Nigerians that there would be incremental power supply in the country under his watch as the Minister of Power. According to him, the Tinubu administration would do everything possible to make electricity accessible to all.

He promised that 1,200 MW would be added to the 4,800MW generated in May to raise the generated power to 6,000 MW by September but all of these goals were not achieved.

As an alternative, the government said it has begun moves to harness renewable energy sources as a critical part of the nation’s energy mix, to ensure sustainable power supply to citizens.

The government also revealed plans to provide Nigerians with at least 20 hours of daily electricity by 2027.

However, many challenges are hampering the actualisation of these targets, ranging from the multiple grid collapse cases, growing debts to power generation companies, and the vandalism of critical power infrastructure, to ageing infrastructure, inadequate maintenance, and insufficient investment in the power sector.

Despite having an installed capacity of approximately 12,500MW, Nigeria often generates only a fraction of this, leaving many areas without reliable electricity.

Commenting, a power expert, Mr Chinedu Amah, queried reasons why the government is borrowing to invest in a sector it claims to have privatised.

Amah, who is the founder of Spark Nigeria Ltd, noted the loans remain of no value if there is no electricity.

Speaking in a telephone interview on Thursday, the power expert urged the House and Senate Committees overseeing the audit of the borrowing process to take action.

He said, “The first question is why is the government investing in a space, it says it has privatised. That’s the first question. Why is it throwing investments and even borrowings at a sector it has privatised?

“Does the Federal Government borrow money to improve the telecommunications sector or automobile companies? That is the first question.

“The next thing is what was it spent on, who is auditing that process, and what are the House and Senate Committees saying concerning those borrowings and their effectiveness in improving power supply and the electricity market.

“If they are borrowing, what is the pathway for recovering the funds for repayment? Borrowing is not a problem, but it’s about what you are spending the money you borrowed on and whether you are spending it judiciously.

“If you are spending it, how do you hope to recover it for value, and when are you paying back that value?

“But at the end of the day, whether they borrow N100bn or whatever, if Nigerians don’t see the light at home, the loans have no value. It must translate to a true value, and it’s an adequate power supply.”

The President of the Nigeria Consumer Protection Network, Kunle Olubiyo, in a chat with our reporter, raised concerns about project conceptualisation in Nigeria, particularly in the energy sector.

According to him, while projects design and delivery globally are aimed at achieving intended objectives, in Nigeria, many projects are often designed to facilitate the pilfering of public funds.

He said at the generation level, critical issues like the lack of a spinning reserve persist despite the availability of funds that could have been allocated to address such challenges.

This oversight, he said, reflects a systemic neglect of pressing infrastructure needs.

Olubiyo also said the prevalence of abandoned projects had left many states across the country severely underserved in terms of energy supply.

He said that even when those projects are completed, they often fail to meet the current energy load demand due to their outdated designs and limited capacity.

He said government funding alone would not suffice to address the challenges, calling for partnerships with the private sector and commercial banks.