Nigeria and the United Kingdom are seeking private-sector investors to finance three hydropower projects in Oyo, Kano and Plateau states as part of efforts to expand electricity generation and attract investment into the country’s power sector.
The projects comprise Ikere Gorge Dam in Oyo State, Ghari Dam in Kano State and the Nigerian Electricity Supply Corporation (NESCO) hydropower facilities in Plateau State.
The initiative focuses on preparing the projects for private investment through technical assessments, environmental evaluations and financial structuring, with the objective of moving the developments towards commercial implementation.
At Ikere Gorge, the existing dam infrastructure has an estimated hydropower potential of up to 14 megawatts (MW), while a proposed development combining hydroelectric generation with solar power could deliver approximately 100MW of installed capacity.
The hybrid approach would allow electricity generation from two renewable sources, potentially improving supply reliability and reducing dependence on a single source of energy.
In Plateau State, the proposed rehabilitation of NESCO’s hydropower facilities is expected to increase generation capacity from approximately 25.5MW to 40.25MW.
The integration of additional solar infrastructure could subsequently raise the project’s combined generation potential to at least 100MW, subject to further development and financing.
Ghari Dam in Kano State is also being prepared for investment, although the final project capacity, financing structure and construction timetable have not been confirmed.
The three developments are at different stages of preparation, and their proposed generation capacities should not be interpreted as electricity already available to consumers.
Investment Preparation Targets Power Sector Financing
Nigeria’s electricity industry continues to face challenges involving inadequate generation, transmission constraints, unreliable distribution networks and limited access to long-term project financing.
These difficulties have increased operating costs for manufacturers, agricultural processors and other businesses that depend on alternative electricity sources to sustain production.
Hydropower projects offer an opportunity to diversify the country’s electricity supply while taking advantage of existing water infrastructure.
However, converting the identified opportunities into operational power plants will require investors willing to provide long-term capital, alongside commercially viable electricity sales arrangements.
The investment preparation process is intended to address some of these concerns by establishing the technical, environmental and financial requirements needed to attract private developers and lenders.
For investors, the critical considerations will include project costs, expected electricity revenues, regulatory approvals, construction risks and the ability of electricity purchasers to meet payment obligations.
The availability of reliable transmission or distribution infrastructure will also determine how effectively electricity generated by the projects can reach businesses and households.
If successfully financed and completed, the developments could support industrial production, agricultural processing and electricity access in their respective locations.
The projects could also create opportunities for engineering companies, construction contractors, equipment suppliers and renewable energy developers.
Nevertheless, no final investment decisions or confirmed construction commencement dates have been announced for the three projects.
The immediate challenge for the Nigerian and British partners will be converting the technical preparation work into binding financing commitments and executable project agreements.