By Alexis Uchendu
The federal government is set to increase electricity tariffs by over 65% in the coming months as part of efforts to align prices with the actual cost of power production.
Presidential adviser on energy, Olu Verheijen, told Bloomberg that while higher tariffs are necessary to sustain the sector, subsidies will be provided for low-income consumers.
She emphasized that cost-reflective pricing is essential to maintaining reliable electricity supply, attracting private investment, and ensuring long-term sector viability.
Since the privatization of power generation and distribution in 2013, Nigeria’s electricity tariffs have remained below actual supply costs, leaving power Distribution Companies (Discos), struggling with debt. Government subsidies have helped cover the shortfall, but profitability remains a challenge.
Speaking at a World Bank-backed energy conference in Tanzania, Verheijen outlined Nigeria’s $32 billion plan to expand electricity access by 2030.
The initiative, supported by private investors, the World Bank, and the African Development Bank (AfDB), aims to tackle the country’s persistent power shortages.
With only 4–5 gigawatts of Nigeria’s 14GW installed power capacity reaching consumers, Siemens AG is partnering with the government on a $2.3 billion project to improve transmission and distribution.
Additionally, decentralized renewable energy projects have already provided electricity access to over seven million rural Nigerians.
Verheijen underscored the need for energy policies that support Nigeria’s economic ambitions, including achieving a $1 trillion economy within five years and transitioning to an upper-middle-income country in 25 years.
