The Nigerian power sector has reflected the nation’s economic growth strategy since the post-independence. This has highlighted the over-dependence on oil and gas and the neglect of other industries, including power. One thing is sure, however. Energy is a strategic infrastructure that represents the most critical requirement for moving any nation’s economy forward. This sector is a sector that supplies the power that powers every other industry to survive.
Early in the post-independence era, there was a high need for large scale investment in power and the government dominated the sector’s activities at that time. The National Electric Power Authority (NEPA) was responsible for generating, transmitting and distributing electricity throughout the nation. However, one thing was the problem. The demand for power was way more than the supply of power in the country. This was because the power infrastructures were in a dilapidated and deplorable state because of inadequate funding and lack of maintenance.
Nigeria is estimated to have total exploitable large-scale hydro power potential of more than 14,120MW capable of producing 50,832 GWh of electricity yearly. However, as of 2014, the total installed capacity of power plants was 7,445 MW, available capacity was 4,949 MW and actual average power generation was less than 3,900 MW.
This generated power figure is far below what’s expected.Because of the massive population of the country and the dire need to generate and distribute enough energy to go round, the government had to open the power industry for private investors to invest. This is called the Power Sector Recovery Implementation Plan approved by the Federal Executive Council in 2017. Since then, the sector has grown rapidly, diversifying into alternative renewable power sources like solar energy and wind energy amongst others, and opening up more power sector investment opportunities.
Reasons to Invest in Nigeria Power Sector
High Market Demand for Power
The average Nigerian needs power to power up his daily activities. With the nation having a huge population, there is a high demand for power. However, this demand is not met because of the unavailability of the basic power supply infrastructures. This inequality between the demand and supply of power is enough reason to invest, solve these problems and generate high returns on investment.Nigeria has the Resources Required to Achieve a Successful venture in the Power Sector
Nigeria is blessed with numerous natural resources, of which avenues of power generation are included. The country supplies power to neighboring countries through her power generating stations. Besides that, Nigeria has the innate potentials required to generate renewable energy.
Government Incentives and Support
Since making the power sector open to investors, the government has been keen on assisting investors in the power sector to thrive and generate more power for the country. Because the country wants to close the gap in the power sector, the government has been highly supportive of these investors through different beneficial policies. Investment opportunities in the Nigerian Power Sector
The Nigerian power sector is a significant sector as the nation is fighting to achieve a sustainable power supply as a way of powering up other aspects of the economy. Because of this, the government encourages both local and foreign investors to invest in all aspects of power, including renewable and non-renewable energy, power distribution amongst others.Some power sector investment opportunities in Nigeria include;
Investment in Power Generation
Investment in Gas-Fired Power Plants
Investment in Hydropower generation
Investment in Coal
Investment in renewable energy like wind, solar, biomass etc.
Investment in Power Transmission and Distribution
Nigeria has an abundance of various renewable energy resources of which solar, wind, biomass and small hydro power (SHP) are the most available. The government is committed to stimulating investment in these renewable energy areas. With a vast untapped potential in the area, the government has projected to generate a minimum of 2,000MW of electricity from renewable sources by 2020.The government makes the investment in the power sector easier by publishing a document in 2016 that states the Nigerian Power Sector Investment Opportunities and the guidelines required to invest.