FG Plans Reconnection of 60% Manufacturers on National Grid to Fund $32.8bn Energy Security

The federal government said it is making desperate efforts to ensure the return of over 60 percent of manufacturing firms, which had exited the national grid.

The Minister of Power, Chief Adebayo Adelabu, disclosed during the release of a National Integrated Electricity Policy (NIEP) to drive the transformation of Nigeria’s power industry.

Adelabu highlighted that an estimated investment of $32.8 billion is needed in the power sector between now and 2030 to enable the country to achieve universal electricity access.

According to the minister, out of the $32.8 billion, $17 billion is expected from the public sector, while about $15.8 billion will be contributed by the private sector.

He emphasized that bringing back the exited manufacturing companies on the national grid is the only way the government can drive the kind of economic growth and national development that we had in mind at the beginning of this process.

Adelabu said “Today, more than 60 percent of our manufacturing industry is completely off-grid. They engage in self-generation, not because they are in rural areas or they are in semi-urban areas, they are in locations where there is access to electricity. But how reliable is this access? We all know that there are a lot of sensitive manufacturing processes that cannot tolerate a one-minute dip in the electricity supply.

“Instead of taking such a risk by connecting to a grid that is not reliable, these industries would rather go for self-generation. I will note the impact of this. It is not cheap. It is very expensive.

“Therefore, our products or commodities being turned out from these factories can never be competitive. The only way we can allow this to contribute to economic growth, industrialization, and national development is to ensure that there is reliability in grid supply, so that all these companies that are currently off-grid can go back to the grid, and this will reduce their cost of production, it will reduce inflation, and our locally manufactured goods can now compete with imported goods.”

He described the power supply as a strategic driver sector for other critical sectors in the economy stressing that President Bola Tinubu recognized that energy was not merely a commodity but the backbone of economic growth, job creation, industrialization, and national development.

He disclosed that the new policy document had been submitted for the approval of the Federal Executive Council (FEC), adding that by Monday next week, the document will be approved.

Nigeria’s power sector, he said, has long been plagued by numerous challenges, creating a significant bottleneck to economic growth and industrialization.

He lamented that despite its vast energy resources, including abundant fossil fuels and renewable energy potential, the country struggles with unreliable electricity supply, leading to frequent blackouts and reliance on expensive alternative power sources, such as generators.

“Many power plants, especially thermal stations, depend on gas, but the inadequate supply of this critical resource – caused by pipeline vandalism, non-payment issues, and regulatory bottlenecks – has often led to underperformance. Besides, the Transmission Company of Nigeria (TCN), which oversees the national grid, has limited capacity to handle the generated power.

“In part, the grid infrastructure is generally outdated and fragile, frequently collapsing under stress and causing nationwide blackouts.

“On the distribution side, power supply remains unreliable due to technical and commercial losses, estimated at over 40 percent,” the minister emphasized.

Adelabu hinted at the event that despite these challenges Nigeria’s power supply grew by 35 percent in the last year.