Uche Cecil Izuora
The demand for electricity is expected to surge across Africa, with Nigeria, Egypt and Senegal topping demand chart.
According to report Nigeria’s demand is expected to grow 36 per cent from 33.7 TWh in 2025 to 45.9 TWh in 2030, followed by annual growth of 8-9 per cent for the next two decades.
Egypt’s demand is projected to increase 21 per cent from 182 TWh in 2025 to 220.7 TWh in 2030, with a 4-5 per cent annual growth rate up to 2050, while Senegal is expected to see demand increase by 32 per cent from 7.6 TWh to 10 TWh between 2025 and 2030, with a 6-7 per cent annual growth rate to mid-century, according to Rystad data.
Nigeria has a long-standing target for renewables to provide 30 per cent of electricity capacity by 2030.
The Nigeria Industrial Revolution Plan (NIRP) adds an additional target of 55 per cent by 2050.
More recently, Nigeria has aligned its third Nationally Determined Contribution (NDC) with the World Bank’s Mission 300 Compact, committing to a target of 50 per cent renewable generation by 2030.
The long-term Energy Transition Plan (ETP) targets 82 per cent of capacity provided by renewables by 2050.
The National Integrated Electricity Policy has specific targets for individual technologies by 2060, including 15 GW of concentrated solar power, 45 GW of solar PV and 25 GW of wind.
Nigeria’s recent energy policy has focused on reforming the electricity sector to encourage private investment.
The Power Sector Recovery Programme was published in 2018 and set out reforms to run up to 2021 designed to improve the reliability of the electricity industry and strengthen governance arrangements to encourage greater investment and increase energy access.
This was followed by the 2023 Electricity Act, which provides the legal framework underpinning the electricity sector. The Act has the authority to require large consumers to buy a certain amount of their power from renewable sources.
It also establishes a feed-in tariff for up to 20 years and sets out a clear framework for connecting renewables projects to the grid.
The Act aims to encourage the decentralization of the electricity system to enable quicker connections in rural areas by allowing state-level regulation and market design.
The national electricity supply industry is regulated by the independent Nigerian Electricity Regulatory Commission (NERC), with state-level regulatory commissions working within its framework.
The NERC is responsible for promoting renewables for distributed (embedded) generation and mini-grids, as well as overseeing the smooth operation of the electricity market. It has been proactive in trying to increase renewables generation. In 2024, NERC required all distribution companies to buy 10 per of their power from embedded sources, with at least 50 per cent of that from renewable sources.
The NERC rules for mini-grids have been recognised as “ one of the region’s most progressive and comprehensive sets of mini-grid regulations as by the World Bank.
The electricity market is administered by the Nigerian Bulk Electricity Trading (NBET). NBET offers standardized PPAs for utility-scale solar, while NERC has set up standardized procedures for permitting and operating mini-grids.
In addition, the government set up tax incentives under the Nigeria Tax Act 2025 to encourage investment in renewables by suspending VAT on renewable energy equipment.
In 2026 it introduced the Economic Development Tax incentive, a 5 per cent annual tax credit on eligible investment over five years for electricity generators, including renewables.
The tax credit can be extended for a further five years if the company reinvests its profits into the business. In addition, the Act creates a 5 per cent surcharge on fossil fuels, further supporting the competitiveness of renewable energy in the market.
Nigeria also introduced foreign-exchange reforms in 2023, alongside other fiscal reforms, leading to an upgrade in the country’s credit rating.
Foreign investment drove a nearly 90 per cent rise in capital inflows in 2025 as a result of the reforms, while foreign direct investment rose from USD 675 million in 2024 to USD 923 million in 2025.