The Federal Government has announced plans to supply Nigerians with a minimum of 20 hours of electricity each day by 2027.
This vision hinges on significant investment in the country’s oil and gas sector, which is currently underperforming.
The Special Adviser to the President on Energy, Olu Verheijen, made this announcement at the Energy Week in Cape Town, South Africa, in a statement released by Abiodun Oladunjoye, the Director of Information and Publicity at the State House.
“By 2027, Nigeria aims to ensure 20 hours of electricity daily for consumers in urban areas and industrial hubs,” Verheijen said during her address, outlining the government’s strategy to increase electricity access amidst Nigeria’s ongoing power challenges.
Verheijen’s comments come in the wake of persistent power grid collapses, with the national grid experiencing its 10th collapse of the year in early November.
This highlights the severity of Nigeria’s electricity crisis, which has caused frequent blackouts across the nation.
The government attributes these recurrent collapses to aging infrastructure, poor maintenance, and a severe lack of investment in the power sector.
Despite having an installed power capacity of around 12,500 megawatts, Nigeria consistently generates only a fraction of this, leaving millions without stable electricity.
Verheijen pointed out that over 86 million Nigerians currently live in areas underserved by reliable power, an issue the government is actively seeking to address through several reforms and projects.
During the Energy Week event, Verheijen elaborated on the government’s plans to revitalize the power sector.
These plans include improving revenue assurance, tackling legacy debt, rolling out seven million smart meters to curb energy losses, and exploring off-grid energy solutions for remote communities.
Verheijen also highlighted how recent macroeconomic reforms, such as the removal of the petrol subsidy and the liberalization of the foreign exchange market, are expected to unlock Nigeria’s economic potential, attracting both local and foreign investments.
She expressed confidence that these reforms will lead to unprecedented growth under the leadership of President Bola Tinubu.
Despite its vast oil and gas resources, Nigeria has long underperformed in production.
Verheijen cited the example of Brazil, which holds only 30% of Nigeria’s oil reserves but produces 131% more oil.
She noted that under-investment in the sector has been a key factor behind Nigeria’s inability to capitalize on its potential.
“Despite our abundant resources, we have underperformed against our potential. For example, Brazil holds only 30% of Nigeria’s oil reserves but produces 131% more. This is largely due to under-investment,” she said.
Verheijen further explained that since 2016, Nigeria has only attracted a meager 4% of total African oil and gas investments, while less resource-rich nations have garnered a much larger share.
She revealed that between 2013, when Nigeria’s last deepwater project reached Final Investment Decision and now, International Oil Companies operating in Nigeria have invested over $82 billion in deepwater projects in other countries considered more attractive.
In response to this trend, the Nigerian government, under President Tinubu’s administration, is making concerted efforts to reshape the country’s investment landscape.
Verheijen outlined a series of reforms, including the introduction of fiscal incentives for deep offshore and non-associated gas projects—marking the first time Nigeria has defined a fiscal framework for deepwater gas exploration.
Verheijen also shared details about efforts to enhance the upstream oil and gas sector, including close collaboration with the office of the National Security Adviser to address security concerns and streamline regulatory processes.
One key initiative is reducing the historically lengthy contracting timelines, aiming to shorten them from an average of 38 months to just 135 days, while also addressing the high-cost premiums that have plagued the industry.
“We have also introduced fiscal incentives to catalyse investments in the midstream and downstream sectors, including compressed natural gas, liquefied petroleum gas, and mini-liquefied natural gas. These align with the broader Presidential Gas for Growth Initiative, which seeks to enable the displacement of PMS and diesel in three key sectors: heavy transport, decentralised power generation, and cooking. These incentives are also stimulating demand for electric vehicles,” Verheijen added.
The government has already unlocked over $1 billion in investments across the energy value chain, with two more major investment projects expected to be finalized by mid-2025.
Additionally, Verheijen revealed that efforts are underway to facilitate the transfer of onshore and shallow water assets to local companies capable of growing production, while supporting the transition of IOCs into deep offshore exploration.
She concluded by noting that Nigeria is poised for a new era of growth, with FID on a multi-billion-dollar deepwater exploration project expected to take place by mid-2025—marking the first such project in over a decade.
“We have unlocked over $1 billion in investments across the value chain and by the middle of 2025, we expect to see FID on two more projects, including a multibillion-dollar deepwater exploration project, which will be the first of its kind in Nigeria in over a decade – one of many to come,” Verheijen emphasized.
