Nigeria’s power market, predicted at approximately $408.45 million in 2025, is expected to move exponentially and is projected to reach USD 503.67 million by 2030, at a compound annual growth rate (CAGR) of about 4.28 per cent.
According to Mordor Intelligence, the growth is driven by industrial demand and distributed power. The company published a new report on the “Nigeria Power Market,” offering a comprehensive analysis of trends, growth drivers, and future projections.
This market reflects Africa’s most populous nation’s economic, demographic, and infrastructural dynamics. With rapid industrial development and urbanisation, Nigerians face persistent electricity shortages, driving an urgent need for more stable and widespread power solutions.
Despite an installed capacity of 13,000-13,500 MW, actual generation continuously operates at only about one‐third of capacity, mainly due to ageing infrastructure, vandalism, and gas supply constraints. Although thermal (gas‐fired) plants account for the bulk of generation, hydro stations remain a significant part of the energy mix, especially in the northern regions.
This release summarises the report’s main findings, including key trends, market segmentation, and the principal organisations active in Nigeria’s electricity sector.
The report projects that Thermal power, primarily gas-fired, will remain the backbone of Nigeria’s electricity supply over the medium term.
The country holds large gas reserves, and gas plants currently contribute around 86 per cent of the capacity. However, frequent gas shortages, fuel theft, and logistical bottlenecks continue to hamper consistent generation.
It also finds that growth in urban centres and light manufacturing steadily increases energy needs. As urbanisation accelerates, electricity demand is projected to rise, propelling investment in grid‐based and off‐grid power sources.
Distributed power generation (DPG)—including mini‐grids, captive power plants, and solar home systems—is creating new opportunities. With the national grid unreliable and often operating below capacity, many urban and rural users are pivoting to decentralised solutions.
The report shows widespread revenue losses from estimated billing—approximately seven million out of 13 million customers remain unmetered.
In response, the government is rolling out 3.5 million electricity meters in 2024, part of a broader plan to install 10 million over five years, backed by government and investment authority financing (~N1.325 trillion or USD 946 million).
This metering push is vital to boosting utility revenues and financial sustainability.
From April to May 2025, Nigeria cut electricity subsidies by 35 per cent after raising tariffs for top‐tier consumers.
That change produced an estimated revenue increase of around N700 billion (≈70%), and lowered the government’s subsidy shortfall from N3 trillion to around N1.9 trillion. This helps ease pressure on state budgets and supports the functioning of generation and distribution companies.
The national transmission network, run by the state‐owned Transmission Company of Nigeria (TCN), faces frequent outages and system collapse. Losses due to outdated substations (some more than 40 years old), vandalism, and weak maintenance contribute to persistent grid instability. In many instances, independent state markets, like Lagos’s regional power projects, have emerged as alternatives to national grid weaknesses.
In addition, the Nigeria Bulk Electricity Trading (NBET) Plc handles bulk power purchases from generators and serves as the key intermediary between GenCos and DisCos under standardised PPAs and vesting contracts.
The Nigerian power market presents a complex mix of entrenched infrastructure problems, ambitious reform initiatives, and gradually shifting market dynamics. At a projected USD 408 million in 2025, with growth to over USD 503 million by 2030, the market is expanding, though not without strain, Mordor Intelligence+1. Efforts to modernise metering, reduce subsidy burdens, and stimulate private and state-level participation offer real promise, but grid failures, debt accumulation, and fuel supply issues remain serious barriers.
Growth opportunities lie in distributed generation, off-grid solar, mini‐grids and captive generation for industrial zones. Meter rollout schemes and tariff reforms aim to lock in revenue for DisCos and GenCos, making the sector more financially viable.
Yet success hinges on sustained investment, sound regulatory execution, and tackling long‐standing challenges like vandalism, ageing transmission lines, and uncertain government payments.
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