IEA: Poor Investment Hampers Nigeria’s Power, Clean Cooking Push

The International Energy Agency (IEA) says though Nigeria has become a major producer and exporter of oil and gas in recent decades, but currently facing common challenges, such as meeting rapidly growing demand, mobilising investment and expanding access to reliable and affordable electricity and clean cooking solutions. 

To address this the first IEA-Nigeria Joint Work Programme has set out a roadmap for cooperation over the coming years, with a focus on energy security, energy investment, energy data and statistics, energy efficiency and clean cooking. 

Nigeria has been developing its fossil fuel industry for several decades, having discovered oil in 1956. 

The Nigerian National Petroleum Company Limited (NNPCL) works alongside international oil companies to produce and export Nigeria’s oil and gas resources, which contribute heavily to the country’s GDP. 

In June, Nigeria’s crude oil production hit a six-year high, averaging 1.56 million barrels per day (bpd), the largest average monthly production volume since April 2020. Total crude oil and condensate production rose for the fourth consecutive month to 1.74 million bpd. 

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC), said the improved performance was “primarily driven by stable production operations across most producing assets and the absence of any major pipeline outages during the period under review.” 

In August, the NUPRC estimated that production rose even further, fluctuating between a daily low of 1.64 million bpd and a high of 1.71 million bpd. 

The recent crackdown on oil theft and sabotage in the Niger Delta has helped Nigeria increase crude production, as the government aims for further growth by 2030.

Meanwhile, Nigeria is also focusing on achieving its green transition goals by expanding its renewable energy capacity. 

At the 2021 COP26 climate summit, Nigeria announced its commitment to carbon neutrality by 2060 by to following its Energy Transition Plan (ETP). 

According to the Federal Government’s Energy Transition and Investment Plans, Nigeria’s shift to domestic renewables is projected to generate $686.8 billion in fuel cost savings by 2060. 

However, achieving this depends on developing 277 GW of total installed capacity and over 104,000 mini-grids by 2030. In September, the government pledged $5 million in investment for the renewable energy sector to be developed and operated by PowerGen Renewable Energy Nigeria Limited.

A report published in August by the energy think tank Ember projects that Nigeria will install 1.7 GW of solar power in 2026, marking a 45 per cent increase from 2025. 

The report said Nigeria’s solar-panel manufacturing output is expected to triple in 2026 compared with 2024. 

The government is also exploring the potential to develop Nigeria’s hydropower capacity with just 2.5 GW currently connected to the grid. 

As Nigeria doubles down on oil production, the government is also aiming to rapidly develop the country’s renewable energy sector to diversify the energy mix and establish Nigeria as a major energy hub in Africa. 

Nigeria has ambitious energy plans for the coming decades, including expanding its oil industry and accelerating the development of its renewable energy sector. 

In recent years, Nigeria has begun to solidify its position as a major energy power in Africa. 

This led the International Energy Agency (IEA) Governing Board to decide in June to welcome Nigeria as an Association country. Nigeria joins South Africa, Kenya, and Senegal as an IEA Association country in sub-Saharan Africa. 

To solidify the agreement, IEA Executive Director Fatih Birol met with Nigeria’s Vice President Kashim Shettima and Minister of State for Petroleum Resources Ekperikpe Ekpo in Abuja in September. The officials discussed Nigeria’s energy and economic priorities and the opportunities created by the country’s closer engagement with the IEA. 

“Nigeria’s admission as an association country with the IEA is a significant milestone for our country, and it reflects Nigeria’s strategic importance in the global energy landscape and the confidence that IEA has placed in our commitment to constructive international energy cooperation,” Vice President Shettima said. “The country will benefit from IEA’s institutional knowledge, the intellectual resources, the reach and expertise to support our nation’s ambitions in this sector.”

Meanwhile, Birol stated, “Nigeria joining the IEA Family is a landmark moment – for Nigeria, for Africa and for the IEA.” Birol stressed, “Our partnership… will help the IEA engage more deeply with energy systems in Africa, while leveraging our expertise and international network in support of Nigeria’s priorities – from strengthening energy security and further realising its huge energy potential to expanding access to electricity and clean cooking solutions.”

Nigeria’s Association reflects the changing IEA landscape, as the organisation aims to expand its engagement with major emerging and developing economies. Nigeria is Africa’s most populous country and one of its largest economies. It is also a major oil and natural gas producer and has begun to develop its renewable energy capacity in recent years. With Nigeria’s association, the IEA now represents over 80 per cent of global energy demand.