The European Union (EU) has declared its intention to inject €37 million into the Nigerian power sector, aiming to address the longstanding issue of inadequate electricity supply in the country.
The disclosure was made by Bolaji Tunji, the special adviser on strategic communication and media relations to the Minister of Power, Adebayo Adelabu, in a statement released on Friday.
Nigeria, despite possessing an installed capacity of 13,000 megawatts (MW) following the privatization of its power sector eight years ago, continues to grapple with abysmally low power generation, hovering around 4,000MW. This predicament has been attributed to a myriad of factors, including the underutilization of power plants and systemic inefficiencies.
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Mr. Tunji highlighted that the EU’s investment adds to the approximately €200 million previously injected into the sector since 2008. The announcement came following a meeting between the EU Ambassador to Nigeria, Samuela Isopi, and Minister Adelabu, during which various intervention programs were discussed.
These programs encompass initiatives such as small hydropower projects, solar installations for healthcare facilities, rural electrification through mini-grid systems, and projects aimed at promoting a circular economy within the power sector.
Ms. Isopi’s invitation for the minister to participate in the launch of EU-funded projects in collaboration with the United Nations Industrial Development Organization (UNIDO) further underscored the EU’s commitment to bolstering Nigeria’s power infrastructure.
In response, Minister Adelabu expressed gratitude for the EU’s support while acknowledging the substantial challenges still confronting the sector. He identified liquidity issues and the absence of a cost-reflective tariff as primary hurdles impeding the sector’s progress, emphasizing the need for sustained collaboration and additional support.
Nigeria’s chronic power deficit has been a longstanding impediment to economic growth and development, costing businesses an estimated $29 billion annually, according to the World Bank. Furthermore, the Energy Progress Report 2022 revealed that a staggering 92 million Nigerians, nearly half of the population, lack access to electricity, reflecting the severity of the crisis.
Despite the EU’s substantial financial commitment, skepticism looms over the potential impact of the investment. Nigerians, disillusioned by decades of unfulfilled promises and squandered funds in the power sector, question whether this latest injection of capital will yield tangible improvements. Over the past eight years, Nigeria has allocated over 1.7 trillion naira to the power sector without achieving the desired outcome of a stable electricity supply.
Moreover, recent attempts by the Nigerian government to attribute the country’s power woes to gas supply shortages have been met with skepticism, as citizens remain unconvinced by successive administrations’ explanations for the persistent electricity crisis.
While the EU’s pledge to invest in Nigeria’s power sector represents a significant step towards addressing the nation’s energy deficit, doubts persist regarding the efficacy of such initiatives in light of Nigeria’s tumultuous history of power sector mismanagement and inefficiency.
Although a significant section of the country hopes for tangible results soon, stakeholders have emphasized how the imperative for transparent governance, accountability, and effective implementation of projects remains paramount to realizing the transformative potential of foreign investments in Nigeria’s power infrastructure.