By Seun Ibiyemi
Energy expert, Nick Agule has blamed Nigeria’s persistent electricity challenges on what he described as “incompetent operators” in the power sector, following the cancellation of a $717.7 million World Bank financing package meant to support reforms in the industry.
Speaking on a Arise television programme, Agule said the withdrawal of the undisbursed funds under the Power Sector Recovery Operation (PSRO) programme reflects deep-rooted structural problems that have continued to undermine the sector’s performance.
The World Bank and the Federal Government recently agreed to cancel the funding after concerns over worsening tariff shortfalls, implementation delays and changing realities in Nigeria’s electricity market.
Agule explained that the PSRO programme, initially launched in 2020 with $750 million and later expanded with an additional $750 million in 2023, was designed to improve efficiency, strengthen revenue collection and reduce financial deficits across the electricity value chain.
According to him, the sharp depreciation of the naira following foreign exchange reforms significantly increased the cost of power generation, making it difficult for the programme to achieve its objectives.
“The power sector is sick, and any intervention that could have helped has now been removed,” he said.
However, Agule argued that the loss of the World Bank funding merely exposed a more fundamental problem within the industry.
“The real issue is that the power sector is in the hands of incompetent operators,” he stated. “These are businesses that should be able to raise funds, invest and deliver services without depending on intervention programmes.”
He noted that despite Nigeria having an installed generation capacity of about 13,000 megawatts, operators have been unable to maximize output due to bottlenecks in transmission and inefficiencies in electricity distribution.
According to him, electricity distribution companies (DisCos) remain the weakest link in the value chain because they are responsible for collecting revenue that sustains the entire sector.
“If the DisCos do not generate enough revenue, transmission companies do not get funding, generating companies cannot pay for gas, and the entire system suffers,” he said.
Agule also dismissed concerns about gas shortages, arguing that Nigeria possesses one of the largest gas reserves in the world and continues to flare significant volumes of associated gas.
“It is ironic that a country that flares gas is talking about shortages for power generation,” he said, calling on the Federal Government to enforce policies that would compel oil companies to harness and channel flared gas into the domestic electricity market.
The energy expert further urged President Bola Tinubu’s administration to revisit the 2013 power sector privatization and consider replacing underperforming operators with more competent investors capable of improving service delivery.
He maintained that repeated interventions from multilateral institutions and government-backed initiatives would not solve the industry’s problems unless structural deficiencies are addressed.
READ ALSO:Apapa Port: Customs intercepts 1.81 tonnes of Canadian loud, expired drugs worth ₦12.7bn
Agule also expressed optimism about the decentralisation of electricity regulation under the Electricity Act, encouraging state governments to establish effective regulatory frameworks and attract private investment into power generation and distribution.
He said states that create enabling environments for investors could significantly improve electricity access and boost economic development.
According to him, “Power is a profitable business. With the right operators, investments and policies, Nigeria can overcome its electricity challenges and unlock the full potential of the sector.”
