Nigeria’s ambition to leverage its vast natural gas reserves to deliver reliable electricity might remain out of reach unless deep structural flaws that are preventing the power sector from performing optimally are tackled, a new energy report has shown.
The report titled ‘Nigeria’s Gas-to-Power Ambitions: Limits, Opportunities and Alternatives’, launched at the Natural Resource Governance Institute (NRGI) dialogue on Monday, highlights that while natural gas will continue to play a critical role in the country’s energy mix, increasing gas production alone will not translate into more electricity unless long standing commercial, infrastructure and financial bottlenecks across the electricity value chain are resolved.
“Gas power’s systemic problems have no easy fixes,” the report noted, underscoring that more than two decades after power sector reforms began, Nigeria has yet to build a functioning market capable of delivering reliable and affordable electricity.
Instead, the sector continues to rely heavily on government subsidies, bailouts and donor financing to remain afloat.
The NRGI report disclosed that with annual subsidy costs approaching N2 trillion, accumulated liabilities and periodic bailout programmes now run into trillions of naira. International lenders, including the World Bank, have also provided financial support, but these interventions have not addressed the sector’s deeper technical and commercial challenges.
