A recent report by the Energy Market and Rates Consultants (EMRC) reveals that only five states in Nigeria have the financial capacity to construct over 100 kilometers of electricity transmission lines. These states are Lagos, Rivers, Ogun, Delta, and the Federal Capital Territory (FCT), Abuja. The report highlights the significant cost involved in building transmission lines and underscores the challenges faced by other states in the country.
The report indicates that $1.58 billion, equivalent to 63% of the total internally generated revenue (IGR) by states in 2021, was generated by the aforementioned five states. However, the construction of transmission lines is a costly endeavor, with estimates ranging from $1.5 million to $2 million per mile, or $931,677 per kilometer.
The estimated cost of Nigeria’s transmission infrastructure, considering the current length of transmission lines (17,740 km), is approximately $16.5 billion for network lines alone. This substantial cost excludes additional expenses such as substations, circuits, control centers, work centers, and financing costs.
While the 2023 Electricity Act empowers states to participate in various aspects of the electricity sector, the EMRC report suggests that only a few states have the financial capacity to embark on extensive transmission line construction projects. The report recommends that states collaborate with the Transmission Company of Nigeria (TCN) on transmission-related matters within their jurisdictions. Additionally, states are advised to explore public-private partnerships as a means of financing transmission projects.
It is worth noting that the empowerment of states to generate, distribute, and transmit electricity under the new Electricity Act could potentially lead to the creation of numerous localized electricity markets. However, Management and Strategic Leadership expert, Biodun Ogunleye, has cautioned that some states may lack the necessary resources and expertise to effectively manage all aspects of the electricity value chain.
As Nigeria seeks to enhance its electricity infrastructure and expand access to reliable power, careful planning and collaboration between different stakeholders will be crucial to ensure sustainable and equitable development across the country’s various states.
