Africa’s energy giant plots grid comeback for industry titans amid $2 billion power revamp

Nigeria is making a renewed push to lure its largest industrial and commercial power users, such as Dangote Industries, MTN, and Nigerian Breweries, back to the national electricity grid.

• Over 200 major Nigerian companies, including Dangote and MTN, currently generate more than 6,000 MW on their own due to unreliable grid supply.
• The government has launched a $2 billion transmission upgrade plan to stabilize power and reconnect industrial consumers.
• Gas shortages and poor pricing remain key challenges, despite Nigeria’s vast 200 trillion cubic feet in reserves.
• Officials say a reliable grid will cut business costs, attract investment, and power Africa’s largest economy more sustainably.

This bold effort aims to end decades of self-generation and chronic outages that have stifled Africa’s biggest economy.

More than 200 major companies in Nigeria currently generate their own electricity, collectively producing over 6,000 megawatts (MW), more than the grid itself delivers to over 220 million people. The Nigerian Electricity Regulatory Commission (NERC) issued 16 new captive-power licenses in the first quarter of the year alone, covering 953 MW of private generation.

At the Nigerian Economic Summit in Abuja, Power Minister Adebayo Adelabu acknowledged the heavy toll unreliable power has taken on business operations, but said the government is investing in reforms aimed at winning back major consumers.

“The major consumers are manufacturers; we are trying to bring them on the grid. Once reliability improves, industrial customers will return, grid power is cheaper than captive generation,” Adelabu said

The government plans to channel $2 billion into transmission upgrades, including the development of new “eastern” and “western” 330kV super-grid backbones. The goal: to stabilize the system, prevent frequent collapses, and deliver uninterrupted supply to commercial users who can pay for quality service.

Power from gas — but gas is the problem

Roughly 70% of Nigeria’s electricity comes from gas-fired plants. Yet, despite the country’s 200 trillion cubic feet of reserves, supply remains erratic due to pricing and payment bottlenecks.

“The gas sub-sector is suffering from double jeopardy — inappropriate pricing that discourages domestic supply, and liquidity issues from non-payment,” Adelabu said.

Nigeria LNG chief executive Philip Mshelbila echoed these concerns, saying production remains “way below par” for both export and domestic consumption.

“Since 70% of our power comes from gas, if you don’t solve the gas value chain, you’re wasting your time in power. Money flows from the light bulb back to the reservoir,” he said.

Private sector’s costly energy burden

Telecom giant IHS Towers, which operates 16,000 sites across Nigeria, runs primarily on diesel.

“Seventy percent of our time is spent on generators, diesel, operations, and logistics. If there were a reliable grid, those resources could go into new verticals and innovation,” said Mohamad Darwish, CEO of IHS Nigeria.

Nigeria’s grid currently delivers less than 5,000 MW, even though installed capacity exceeds 14,000 MW. Officials hope that ongoing modernisation, backed by the World Bank and Siemens’ Presidential Power Initiative, which targets 7,000 MW deliverable capacity in its first phase, will mark a turning point.

If successful, the move could not only re-energise Nigerian industries but also signal a broader shift across Africa’s energy landscape, where nations are seeking to power industrial growth with reliable, affordable electricity rather than diesel and darkness.