Nigeria implements energy zones to stabilize power sector

The Nigerian federal government is implementing a strategy to create energy zones to address long-standing financial illiquidity and technical challenges within the national power sector. This initiative aims to identify and prioritize high-demand commercial and industrial hubs, such as Lagos, the Abuja-Kaduna-Kano corridor, and the Enugu-Port Harcourt axis, to provide them with 24-hour uninterrupted electricity.

Minister of Power Joseph Tegbe has identified financial constraints as a primary driver of the sector's instability, noting that a lack of liquidity affects the entire value chain. This includes the inability to settle gas debts owed to power-generating companies and the lack of funds required to replace aging transmission infrastructure.

The energy zone approach is designed to unlock industrial demand and assist electricity distribution companies in overcoming losses. While data from the Nigerian Electricity Regulatory Commission (NERC) indicates that electricity collection rates are gradually improving, the sector continues to struggle with illegal grid connections and non-payment by some consumers.