THUR APRIL 30 2026-theGBJournal| Mobilising investment remains critical to the success of Nigeria’s electricity reform. Discussions at the roundtable showed that the shift to a multi-tier market is changing how power projects are structured, evaluated and financed.
Insights from Mr Peter Olowononi, Director, Client Relations, Anglophone West Africa, African Export–Import Bank (Afreximbank), indicated that from a financier’s perspective, access to capital is not the main constraint facing the sector.
He noted that financiers continue to see interest in Nigeria’s power market. The primary challenge lies in structuring projects with clear risk allocation, predictable revenue and credible regulatory oversight.
A key change following the implementation of the Electricity Act 2023 is how electricity projects are being structured and presented to financiers.
By enabling greater decentralisation and clearer delineation of roles across the electricity value chain, the Act has supported a shift away from broad exposure to the national electricity market.
Instead, investors are increasingly assessing smaller, defined opportunities, including state-led electricity initiatives with identifiable demand, contracted off-takers and clearer governance arrangements.
These features reduce uncertainty around revenues, regulation and execution, allowing financiers to assess and price risk at the project level rather than across the entire sector.
This shift towards smaller, project-defined electricity investments reflects the practical impact of decentralisation under the Electricity Act 2023.
As states begin to define electricity strategies within their jurisdictions, individual projects can be aligned more closely with local demand, revenue sources and operating conditions.
Greater clarity around these factors improves investment assessment and allows financing decisions to be more targeted.
However, the discussions made clear that clearer project definition alone is not sufficient. Investors continue to focus on regulatory certainty, tariff credibility and cash-flow security.
Where tariffs are not cost-reflective or enforcement frameworks lack clarity, investment decisions are delayed or repriced. Weak revenue collection and fragile financial positions within the distribution segment also influence how risk is assessed.
The Honourable Minister of Power reinforced this perspective during the session.
He noted that Nigeria faces a substantial investment gap across generation, transmission and distribution.
According to the Minister, the Electricity Act 2023 creates room for states and the private sector to play a larger role in funding the system.
However, he stressed that capital will only flow where investors have confidence that their investments can be recovered over time.
From the financier’s perspective, state-led electricity strategies are beginning to address this concern.
Mr Olowononi explained that projects which link generation, distribution and offtake within defined geographic areas offer clearer revenue visibility.
Where demand is anchored by public infrastructure, industrial users or structured offtake arrangements, financing discussions tend to progress more quickly.
At the same time, concerns remain around the financial position of distribution companies. Investors continue to factor in legacy debt, metering gaps and collection performance when assessing projects that depend on distribution networks.
Decentralisation improves transparency; however, it also highlights DisCos’ financial and operational weaknesses more clearly with the evolution to multi-tier markets.
Overall, the financing signals from the roundtable points to interest in Nigeria’s electricity sector. However, investment depends on translating the ongoing reform into bankable projects.
The pace at which capital can be mobilised will depend on how effectively regulatory clarity, tariff frameworks and revenue assurance are applied at both federal and state levels.
Note: Extract from latest PwC report on Nigeria’s power sector: Priority actions for the successful evolution of Nigeria’s multi-tier electricity market.
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