Professor Bart Nnaji, former Minister of Power, has urged the Federal Government to revive Power Purchasing Agreements (PPAs) to attract private sector investment and boost Nigeria’s electricity generation.
Nigeria’s current installed capacity stands at 13,000 megawatts (MW), but the country only generates around 5,000MW due to several challenges, including:
- Insufficient natural gas supply for gas-fired plants, which account for 80% of national grid electricity
- Limited investment in new power plants
- Inadequate transmission infrastructure
Nnaji emphasized that PPAs provide essential comfort to investors, enabling them to secure long-term funding. He cited the 450MW Azura power plant in Edo State, built at a cost of $900 million, as a successful example. The plant’s creditors provided funding due to the partial risk guarantee (PRG) offered in 2012.
Since the suspension of PPAs in 2015, no new private sector power plants have been built. High-profile projects, such as ExxonMobil and General Electric’s proposed 1,000MW thermal plant in Aba, have stalled despite significant investments.
Experts estimate that building a single 1MW gas plant costs between $1.3 million and $1.5 million. Cliff Eneh, an energy consultant, noted that the government lacks resources to bridge Nigeria’s over 50,000MW gap.
Comparatively, Egypt and South Africa, Africa’s largest economies, generate 58,000MW each. However, South Africa has experienced load shedding since 2007 due to inadequate power supply.
Nnaji stressed the urgency of addressing Nigeria’s gas supply crisis, highlighting his own 188MW Geometric Power Plant’s struggles with gas scarcity. Despite building a 27-kilometer gas pipeline, the plant often goes weeks without supplies.
The former minister attributed the power sector’s challenges to Nigeria’s broader economic crisis. He advocated for patriotism and local content development, citing Geometric Power’s policy of using locally produced vehicles and materials.
The forum, organized by Udo Udoma and Belo-Osagie law firm, brought together professionals from the electricity value chain, including:
- Dafe Akpeneye (NERC Commissioner)
- Kola Adesina (Sahara Energy CEO)
- Nicholas Okafor (Udo Udoma and Belo-Osagie law firm’s energy team head)
Reviving PPAs could unlock critical investment in Nigeria’s power sector, driving growth and development.
