USAID Invests ₦115bn in Nigeria’s Power Sector to Alleviate Electricity Shortage

The United States Agency for International Development (USAID) and the Federal Ministry of Power signed a memorandum of understanding (MOU) on Wednesday to secure Nigeria’s commitment to electricity sector reforms, market transparency, liquidity, and expanding access to affordable power.

The MOU was signed by USAID/Nigeria Mission Director Melissa Jones and the Permanent Secretary of the Federal Ministry of Power, Mahmuda Mamman. The agreement supports the implementation of an ₦115.2bn US government grant-funded technical assistance programme intended to support power sector development and reforms in Nigeria. Both parties announced this in a statement issued in Abuja by the power ministry.

More than 85 million Nigerians lack access to grid power, and many experience unreliable power supply. Due to these challenges, many Nigerian families and businesses rely on expensive, emission-intensive petrol and diesel backup generators.

The Nigerian power sector’s long-standing challenges hinder industrial growth, economic competitiveness, rural development, health and education sector performance, and the nation’s overall economic growth and development.

Jones reiterated the US government’s commitment to advancing electrification in Nigeria. She said, “Today’s goal is to strengthen collaboration between USAID and the Federal Government of Nigeria and to provide a framework for our partnerships with other key actors, including state and local governments, electricity generation and distribution sectors, and the off-grid sector. It is laudable and timely.”

The US government’s Power Africa Coordinator, Richard Nelson, observed the signing ceremony during his first official visit to Nigeria. “Nigeria is at the core of Power Africa’s strategy. I look forward to elevating our partnership to advance Nigeria’s progress towards our shared goal of ensuring access to reliable, sustainable, and affordable power for all,” he stated.

The Minister of Power, Adebayo Adelabu, expressed gratitude for USAID’s continued support, emphasizing the collaboration’s transformative potential. “This partnership with USAID is a significant milestone in the journey towards achieving a sustainable and reliable electricity supply for all Nigerians. Together, we will tackle the longstanding challenges in the power sector, ensuring transparency, enhancing market liquidity, and accelerating our transition to clean energy solutions,” he stated.

The statement noted that USAID works to mitigate these challenges through the Power Africa Initiative, a US government-led partnership that harnesses the collective resources of public and private sectors to double access to electricity in sub-Saharan Africa.

Through the Power Africa Initiative, over 33 million Nigerians have been connected, about $4.5bn has been mobilized for on-grid and off-grid power projects in Nigeria, and over 200 private companies in the off-grid sector have received assistance.

“This initiative will strengthen policy frameworks, enhance regulatory capacities, and encourage private sector participation, ultimately driving the nation towards its clean energy and net zero carbon emissions targets. The ministry is committed to ensuring these interventions deliver tangible benefits to all Nigerians, promoting economic growth and sustainable development,” the statement concluded.