Precious Anga
Lagos — The International Energy Agency, IEA, has identified inadequate investment as a major challenge to Nigeria’s efforts to meet rising energy demand, improve electricity access and expand clean cooking solutions.
The agency said Nigeria, despite becoming a major oil and gas producer and exporter over several decades, continues to face the challenge of mobilising the investment required to develop its energy sector and provide reliable and affordable energy to its growing population.
The concern forms part of the first IEA-Nigeria Joint Work Programme, which sets out a roadmap for cooperation between both sides, with emphasis on energy security, investment, energy data and statistics, energy efficiency and clean cooking.
Nigeria’s oil and gas industry remains central to the country’s energy economy. Oil was discovered in the country in 1956, and the Nigerian National Petroleum Company Limited, NNPCL, alongside international oil companies, continues to produce and export the country’s crude oil and natural gas.
Recent production figures indicate an improvement in upstream performance. Nigeria’s crude oil production reached an average of 1.56 million barrels per day, bpd, in June, the highest monthly average since April 2020, while total crude oil and condensate production increased to 1.74 million bpd.
The Nigerian Upstream Petroleum Regulatory Commission, NUPRC, attributed the June improvement largely to stable operations across most producing assets and the absence of major pipeline outages.
By August, the commission estimated that crude production had risen further, fluctuating between 1.64 million bpd and 1.71 million bpd.
The improvement has also coincided with intensified efforts to tackle oil theft and pipeline sabotage in the Niger Delta, as the Federal Government seeks to sustain production growth towards 2030.
However, the IEA’s assessment extends beyond crude oil production, highlighting the wider investment gap confronting Nigeria’s energy transition and efforts to expand access to electricity and cleaner cooking fuels.
Nigeria has also committed to expanding renewable energy as part of its longer-term energy transition strategy. At the 2021 COP26 climate summit, the country announced its ambition to achieve carbon neutrality by 2060 through its Energy Transition Plan.
The Federal Government’s Energy Transition and Investment Plans project significant fuel-cost savings from greater domestic renewable energy deployment. Achieving the targets, however, would require substantial expansion of electricity generation capacity and mini-grid infrastructure.
Nigeria is also seeking to increase solar and hydropower development as it works to diversify its energy mix. An Ember report published in August projected that the country could install 1.7 gigawatts of solar capacity in 2026, representing a 45 per cent increase from 2025.
The government has further indicated interest in expanding hydropower, although only about 2.5 gigawatts of hydropower capacity is currently connected to the national grid.
The developments underline the scale of investment required as Nigeria pursues two energy priorities simultaneously: sustaining growth in its oil and gas industry while accelerating the development of renewable energy and improving electricity access.
Nigeria’s closer relationship with the IEA is expected to support these efforts. In June, the IEA Governing Board agreed to welcome Nigeria as an Association country, making it one of the agency’s Association countries in sub-Saharan Africa alongside South Africa, Kenya and Senegal.
During a September visit to Abuja, IEA Executive Director Fatih Birol met with Vice President Kashim Shettima and Minister of State for Petroleum Resources, Ekperikpe Ekpo, to discuss Nigeria’s energy and economic priorities and opportunities arising from the country’s closer engagement with the agency.
Shettima described Nigeria’s association with the IEA as a significant milestone, saying the partnership would provide access to the agency’s institutional knowledge, expertise and international network.
Birol, meanwhile, said the partnership would enable the IEA to engage more deeply with Africa’s energy systems while supporting Nigeria’s priorities, including strengthening energy security, realising its energy potential and expanding access to electricity and clean cooking.
With Nigeria seeking to increase oil and gas production, expand renewable energy and improve electricity and clean cooking access, the IEA’s assessment puts investment at the centre of the country’s ability to translate its energy resources and plans into reliable energy supply and broader economic development.
