Despite extensive investments and decades of reform efforts in Nigeria’s electricity sector, the national grid continues to operate far below its full potential, recording a significant energy loss of 4,091 megawatt-hours per hour (MWh/h) in September 2025, according to the latest operational data released by the Nigerian Electricity Regulatory Commission (NERC).
The September 2025 Operational Performance Factsheet, made public on Thursday, painted a sobering picture of persistent inefficiencies in power generation and distribution. It revealed that the Plant Availability Factor (PAF) for the month stood at just 38 percent, meaning that only 5,200 megawatts (MW) were available for dispatch out of a total installed generation capacity of 13,625 MW nationwide.
Similarly, the Average Load Factor was recorded at 78 percent, highlighting that much of the available generation capacity remains underutilized due to systemic constraints in the transmission and distribution networks.
According to NERC, top-performing power plants such as Zungeru, Egbin, Kainji, and Jebba accounted for the bulk of energy generation during the period, contributing substantially to the national output despite widespread operational and financial challenges across the sector.
FG Unveils N4 Trillion Plan to Address Liquidity Crisis
In a bid to restore financial stability and boost investor confidence in the electricity market, the Federal Government has finalized the implementation framework for the Presidential Power Sector Debt Reduction Plan, which was approved by President Bola Tinubu and endorsed by the Federal Executive Council (FEC) in August 2025.
Under the plan, the government will issue ₦4 trillion in sovereign-backed bonds to settle verified debts owed to generation companies (GenCos) and gas suppliers. The move, officials say, is designed to eliminate long-standing liquidity bottlenecks that have crippled the industry’s ability to sustain and expand operations.
Energy experts believe this marks a major policy shift aimed at rebuilding trust between the government, investors, and operators. “This intervention addresses a legacy debt overhang that has constrained investment, weakened utility balance sheets, and hindered reliable power delivery across the country,” said Mr. Tony Elumelu, Chairman of Heirs Holdings and Transcorp Power.
A Shift Toward Sustainable Power Delivery
Speaking on the broader implications of the reform, Mrs. Olu Verheijen, Special Adviser to the President on Energy, emphasized that the administration’s focus is now on establishing a sustainable framework for growth in the sector.
“Our priority is to create the right conditions for investment — from modernizing the national grid and expanding distribution networks to scaling up embedded generation projects,” Verheijen explained. “By closing metering gaps, aligning tariffs with efficient costs, improving subsidy targeting for vulnerable households, and restoring regulatory trust, we are moving from crisis response to sustained delivery.”
Analysts say the government’s approach reflects a renewed effort to tackle the root causes of the nation’s power instability, a challenge that has continued to impede industrial productivity and limit economic growth.
Despite possessing one of Africa’s largest installed generation capacities, Nigeria still grapples with an unreliable power supply due to poor infrastructure, delayed market payments, and low private-sector confidence.
Industry observers, however, remain cautiously optimistic that the new financial framework, if implemented transparently, could serve as a turning point in unlocking private capital, driving grid modernization, and ultimately delivering stable electricity to millions of Nigerians.
