REPORT 1 Contents Executive Summary ------------------------------------------------------------------ 4 Introduction ----------------------------------------------------------------------------4 Improving the Current State of Power Supply --------------------------------- 5 Improving Grid Supply ---------------------------------------------------------------5 Off-Grid Efforts ------------------------------------------------------------------------ 6 The Importance of Coordination, Collaboration and Partnerships -------- 6 Conclusion ------------------------------------------------------------------------------6 2 Number of Zoom Number of Views on Number of Attendees: Facebook: Physical Attendees: 125 105 75 Panelists 3 Executive Summary The Nigeria Electricity Supply Industry faces Other efforts that the FGN has taken include several bottlenecks. However, the federal the Rural Electrification Strategy and government (FGN) has also taken some critical Implementation Plan and the implementation actions to put the country on the path toward of the Nigeria Electrification Plan, which aims universal access. The FGN launched the Rural to improve electricity access for last-mile Electrification Strategy and Implementation regions, especially unserved and underserved Plan and the Nigeria Electrification Project to rural community dwellers and the institutions focus on underserved rural populations and in these places. Also, the FGN launched, in rural institutions. The Rural Electrification partnership with the German government, the Agency (REA) has since established the Rural Presidential Power Initiative, which seeks to Electrification Fund. The FGN also launched raise the consumed electricity from its current Presidential Power Initiative in 2018 to improve state to about 7 GW in its first implementation the power supply by 7GW in its first phase. The phase. 70th Power Dialogue sought to discuss the key achievements of the sector and some of the In collaboration with the efforts of the Nigerian industry’s challenges. government to improve power supply, the World Bank responded with a large and The discourse also discussed the federal comprehensive portfolio of projects that government’s recent moves to enhance provide support to the FGN programs – The collaboration among several stakeholders. Power Sector Recovery PforR (PSRO, US$750m) Stakeholders’ recommendations include the supports the implementation of critical need for improved collaboration among key reforms included in the FGN’s PSRP that aims actors in the sector and the need for increased to improve power sector policy and regulatory private sector participation in the energy sector. environment, enhancing its transparency, strengthening power sector’s financial sustainability and reducing its fiscal risk. The Introduction Nigeria Electrification Project (NEP, US$350m) supports expanding electricity access through The Nigerian electricity sector has not yet off-grid solutions to remote rural communities been able to meet the expectations of the using private sector financing models. The Nigerian people. Over 80 million Nigerians FGN has also unveiled an Energy Transition currently do not have access to electricity. For Plan that defines the country’s pathway to net- those connected to the grid, inefficiencies and zero. The plan includes revised policy measures market challenges often mean insufficient for accelerating clean energy adoption as the supply. Other issues facing the sector include country looks to meet its NDC targets. inconsistent tariff policy implementation and high, unsustainable losses in the distribution The 70th Power Dialogue discussed the key network. To tackle and solve these challenges, achievements of the sector and some of the several programmes, including the Power industry’s challenges. In addition, the discourse Sector Recovery Programme (PSRP), have been highlighted the progress made and bottlenecks initiated by the Federal Government of Nigeria experienced in delivering energy access (FGN). to Nigerians. The discussion also provided updates on the impact of sector policies and 4 interventions in the sector. The Bank is working North West, South East and South-South toward supporting the country’s Energy regions cutting through the states of Kano, Transition Plan. Kaduna, Delta, Edo, Anambra, Imo, and Abia States. The second phase (NTEP2) will focus on Improving the Current State of Power grid expansion. Supply The Presidential Power Initiative (PPI) – an Infrastructural challenges have resulted initiative of the Nigerian government in in inefficiencies in the sector over the past collaboration with the government of Germany decade. Despite the sector’s privatisation in and Siemens – seeks to increase the generation 2016, the power supply has not improved, capacity from 4,500MW to 25GW by 2025.2 with the average daily supply capacity still The first phase of the PPI focuses on critical below 4GW. The current administration plans and quick-win interventions to increase the to solve this challenge. The Minister of Power, system’s end-to-end operational capacity to 7 Engr. Aliyu Abubakar related some of the GW. The second phase addresses bottlenecks federal government’s efforts to expand energy in the distribution networks and enables access in Nigeria. The government is increasing maximal use of the existing generation and infrastructural development in the energy distribution networks. This phase is expected sector. The projects cut across the electricity to bring the system’s operational capacity to value chain’s generation, transmission and 11GW. The initiative’s final third phase aims distribution segments. The World Bank is to attain a total operational grid capacity of also supporting the federal government in 25GW in the long term. The implementing implementing several initiatives to improve the PPI team recently visited Germany to inspect operational capacity of the Nigeria Electricity the manufacturing and production process of Supply Industry. ten mobile substations and transformers. The equipment is expected to be delivered in Q4 2022. Improving Grid Supply The World Bank also supports electrification Working towards improving transmission, efforts for improved socio-economic the government announced the completion development in Nigeria. The World Bank of the first phase of the Nigeria Transmission had approved about US$1.5 billion in new Expansion Programme (NTEP1). The commitments to support the existing programme is financed by the World Bank, government initiatives for the power sector. the African Development Bank, and the Japan In addition, the Bank is a key partner in International Cooperation Agency. NTEP1, a implementing the Power Sector Recovery part of the national Transmission Rehabilitation Programme (PSRP). The PSRP aims to improve and Expansion Programme (TREP), aim to supply reliability, achieve financial and fiscal support the rehabilitation and upgrade of sustainability and enhance accountability that the country’s transmission substations and unlocks access to private local and international lines.1 The resulting objective is an increase in financing.3 power transmission network and improved distribution capacity. NTEP1 is located in the 1 Nigeria - Nigeria Transmission Expansion Project Phase 1 (Ntep1) - Project Appraisal Report, AfDB (2019), https://www.afdb.org/en/documents/ nigeria-nigeria-transmission-expansion-project-phase-1-ntep1-project-appraisal-report#:~:text=The%20Nigeria%20Transmission%20 Expansion%20Project,transmission%20network%20and%20allow%20distribution. (Assessed June 26, 2022) 2 All About the Presidential Power Initiative, Siemens Energy. https://www.siemens-energy.com/africa/en/company/about-us-africa/ presidential-power-initiative.html. (Assessed on June 26 2022) 3 Power Sector Recovery Programme Factsheets 5 Off-Grid Efforts communication and community involvement While the government is working to improve in projects will reduce repeated vandalism on access, it also plans to integrate clean energy key transmission infrastructure and right-of- into the country’s mix. The government is way issues that have hampered transmission currently negotiating and working with solar network development.5 power developers for the development of 14 projects which will generate about 1GW of Meeting Nigeria’s energy sector financial clean energy. However, given that clean energy needs will require a market-driven approach. integration into the grid is not possible at this While the World Bank’s Nigerian power sector time, the projects will be off-grid. Renewable engagement is one of the largest in the world, energy projects will remain off-grid until the more private sector participation is needed grid meets its baseload requirement.4 to meet universal energy access targets. The country’s private sector has to participate In addition to improving grid electricity supply, more as local financing is required to provide the government and the World Bank also energy access solutions at the scale needed. collaborate on off-grid clean energy projects. However, for this to happen, there must be The Bank supports the Nigeria Electrification a concerted effort from the government to Plan (NEP). The NEP is implemented by the Rural establish and implement a clear regulatory and Electrification Agency (REA). The REA secured policy environment. This is essential to drive financing of about USD550 million from the private sector investment, create incentive World Bank and the African Development Bank mechanisms for stakeholders and ensure and has connected over 11,000 people through sector accountability. The effects are already off-grid solutions, including mini-grids and solar visible in the off-grid space where the Nigeria home systems (SHS). The federal government, Electrification Plan offers a huge opportunity through the Rural Electrification Agency (REA), for increased private sector participation. In is also implementing the Solar Power Naija addition, given the huge capacity needs of the and the Energising Economies Initiative (EEI) energy sector, the private sector will also play a focus on improving SHS deployments and off- huge role in covering the skills gap. grid deployments for economic purposes. The World Bank is also a huge supporter of Nigeria’s decarbonisation efforts. In addition, the Bank Conclusion is working toward supporting the country’s Energy Transition Plan. The Nigerian electricity supply sector is plagued by challenges that have affected its capacity to meet the country’s energy needs. The country The Importance of Coordination, is poised to solve not only to improve its Collaboration and Partnerships power supply but also to lead in clean energy adoption in the region. Development partners, In achieving universal energy access in Nigeria, like the World Bank, have committed to and there is a need for increased collaboration are currently financing projects to accelerate and coordination between sector actors adequate electricity supply in Nigeria. These and stakeholders. This will help to resolve institutions have restated their commitment to some challenges that have hindered project support the country. implementation. For instance, improved 4 World Bank, Minister of Power Discuss Power Sector Progress at TEH Power Dialogue, The Electricity Hub, https://theelectricityhub.com/ world-bank-minister-of-power-discuss-power-sector-progress-at-teh-power-dialogue/. (Assessed on June 23 2022) 5 Vandals destroy six power transmission towers of TCN in Delta, The Nation. 2019. https://thenationonlineng.net/vandals-destroy-six-power- transmission-towers-of-tcn-in-delta/. (Assessed on June 22, 2022) 6 In addition to the efforts made by development partners, the federal government is driving infrastructural development and interventions that will improve the power supply. However, the government and development partners cannot meet the financing requirements for Nigeria’s electricity targets alone, hence the need for the government to create an enabling environment to promote private-led investments in the energy sector. 7