Precious Anga
Lagos — Nigeria’s ambition to attract fresh investment into gas-fired electricity generation is facing growing uncertainty as persistent liquidity challenges, inadequate infrastructure and declining access to international financing continue to undermine investor confidence, energy experts have warned.
Speaking during a virtual media briefing on Nigeria’s Energy and Economic Diversification Pathways, organised by the Natural Resource Governance Institute (NRGI) in partnership with the Nigeria Council on Climate Change (NCCC), The NEXTIER Group and The Electricity Hub, stakeholders disclosed that the country could struggle to secure new Final Investment Decisions (FIDs) for large-scale gas-fired power projects unless longstanding structural problems within the electricity sector are addressed.
They also noted that despite Nigeria’s vast natural gas reserves, solar energy is expected to remain the dominant source of new energy investments as global financing increasingly favours renewable energy technologies. At the same time, they cautioned that borrowing to finance the country’s energy transition continues to add pressure to Nigeria’s rising debt profile.
Lead, Sustainable Energy Supply at NRGI, Aaron Sayne, said Nigeria’s gas-to-power sector has reached a critical stage where investors are becoming increasingly reluctant to commit capital without major reforms.
“Nigeria’s gas-fired power sector has reached a critical point where investment will remain elusive unless the underlying commercial and operational challenges are addressed,” Sayne said.
He explained that although natural gas has historically been the backbone of Nigeria’s electricity generation, its contribution has remained largely stagnant because of persistent commercial, technical and financial constraints.
According to him, inadequate gas supply, poor electricity transmission infrastructure and chronic liquidity problems across the power value chain remain the three biggest obstacles preventing new investments in gas-fired generation.
Industry analysts have repeatedly identified poor revenue recovery, mounting debts owed to power generation companies and payment uncertainties as key risks discouraging investors from committing funds to new gas projects.
Representing the Nigeria Council on Climate Change (NCCC), Jummai Vandu reaffirmed the Federal Government’s commitment to balancing economic development with climate objectives, stressing that natural gas would continue to play an important role in Nigeria’s energy transition.
“Nigeria remains committed to achieving net-zero emissions by 2060 while balancing the expansion of renewable energy with the responsible transition of its natural gas resources,” Vandu said.
She added that the government is implementing the Climate Change Act 2021 across key sectors while aligning national policies with Nigeria’s Nationally Determined Contributions (NDCs) under the United Nations Framework Convention on Climate Change (UNFCCC).
Also speaking, NRGI Country Manager Tengi George-Ikoli said the organisation’s review of Nigeria’s Energy Transition Plan was designed to identify opportunities for improvement rather than evaluate government performance.
She observed that although the solid minerals sector currently contributes only about 0.5 per cent to Nigeria’s Gross Domestic Product, increasing global demand for critical minerals presents a significant opportunity for economic diversification beyond oil and gas.
The experts maintained that unless Nigeria improves power sector liquidity, strengthens transmission infrastructure and restores investor confidence, the country risks missing opportunities to unlock its vast gas resources, even as renewable energy continues to attract a larger share of global investment capital.
