Nigeria's Ministry of Power 2025 Budget Focus: Strengthening Power Generation and Distribution

Nigeria's Ministry of Power 2025 Budget Focus: Strengthening Power Generation and Distribution

The Nigerian Ministry of Power plans to allocate a large amount of funds in the 1.2 trillion naira budget for 2025 to finance a series of multilateral and bilateral loan projects aimed at improving the country's power generation and distribution capabilities.

According to Wednesday's analysis, the Ministry of Power will allocate 810 billion naira to repay the World Bank's $1.74 billion power sector recovery loan and $2.62 million distribution sector recovery program (DISREP) loan. The DISREP project aims to install 3.2 million meters to improve the technical and financial performance of power distribution companies.

In addition, the Ministry of Power also proposed to allocate 269.74 billion naira for special intervention power projects, 47.35 billion naira for the construction of transformers and substations, and 36.82 billion naira as matching funds for designated transmission line and substation projects.

The breakdown of the Ministry of Power’s allocations for 2025 shows that N585 billion will be provided as additional financing for the resumption of operations in the power sector, while the DISREP project will cost N225 billion. Nigeria has long suffered from insufficient power supply, affecting the productivity of small businesses and manufacturers. The challenge has been exacerbated by 12 collapses of the national grid in 2024.

To address this problem, Power Minister Adelaidebu Adebayo revealed that Nigeria needs at least $10 billion over the next decade to achieve 24-hour power supply across the country. However, multiple underlying factors have hindered the president’s goal of achieving 6,000 megawatts of power generation this year.

Further analysis shows that the government will allocate N36.26 billion as matching funds for the Zukungu transmission line and designated lines and substations, N250 million for projects assisted by the Japan International Cooperation Agency (JICA) and the German Agency for International Cooperation (GIZ).

In addition, the government has allocated N10 million for the construction of a 50MW grid-connected solar project in Gwewa, Jigawa State, and N160 million as matching funds for bilateral projects of the International Solar Alliance (ISA), the West African Center for Electricity Interconnection and Renewable Energy (ECREEE) and the Korea International Cooperation Agency (KOICA).

Under the special intervention project, the government proposed to allocate N25 billion for the completion of outstanding priority projects under the Transmission Company of Nigeria, N36 billion for distribution interventions in six geopolitical zones, including transformer, cable and meter replacement, and N150 billion for funding for the Presidential Power Initiative.

Meanwhile, the government has allocated N24 billion for the provision of mini-grids in federal and state polytechnics across the country, N10 billion for emergency intervention in infrastructure distribution, and N24.7 billion for the provision of solar street lights on major highways across the country.

Other projects include N8.1 billion for awareness, public enlightenment and orientation on power asset destruction, N150 million for skills training before retirement in the power sector, and N1.41 billion for the provision of basic facilities in affected communities in 38 resettlement projects.