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For Businesses, Manufacturers & Investors
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Prof. BARTH NNAJI Gives Options
Nigeria’s persistent electricity crisis has continued to pose a major challenge to businesses, manufacturers and investors, with many companies spending a significant portion of their earnings on alternative power sources. From diesel generators to petrol-powered plants and solar installations, businesses have been forced to find ways to remain operational despite the country’s unreliable electricity supply.
However, former Minister of Power, Professor Barth Nnaji, believes that electricity distribution companies (DisCos) can play a much bigger role in solving the problem by investing in power generation, strengthening their distribution networks and ensuring a reliable supply of electricity to businesses.
Nnaji made this position known while delivering the keynote address at the third edition of a Business Forum, Business Forum 3.0, held on Friday, October 30, 2026, at Jubilee Hall, Lagos Country Club, Ikeja, Lagos. The forum was organised around the Theme, Energy Costs and Business Survival: Driving Profitability Amidst Nigeria’s Power Crisis.
The gathering brought together industry experts, policymakers, business leaders and stakeholders in the energy sector to examine the country’s electricity challenges and discuss practical ways of reducing energy costs, improving business profitability and ensuring the sustainability of enterprises.
Speaking at the event, Nnaji explained that Nigeria’s electricity privatisation programme had not delivered the expected results because many investors entered the sector without the technical expertise, financial strength and long-term commitment required to operate successfully.
He recalled that the privatisation process began during his tenure as Minister of Power, stressing that the original intention was to hand over electricity assets to investors who possessed both technical and financial capacity.
“During the privatisation process, we said there would be two criteria for handing over assets to private-sector companies: technical capacity and financial capacity. Not one or the other, but the two of them must go together,” he said.
According to him, the failure to properly enforce these requirements contributed significantly to the challenges facing the electricity industry today.
He explained that electricity is a capital-intensive business that requires patience and long-term investment, unlike some other sectors where investors can begin to make returns relatively quickly.
“The electricity business everywhere requires huge capital outlay. The power business requires long gestation periods and, therefore, efficient investment. It can take up to seven to ten years before you begin to see a turnaround in your business if you actually manage it well,” he stated.
Nnaji also observed that some distribution companies had become distressed, with banks that financed their acquisition taking over their operations and replacing their boards and management teams.
He noted that the industry needed investors who were genuinely interested in solving Nigeria’s electricity problems rather than those driven solely by the desire to make immediate profits.
“Passion, rather than only profit motive, is a critical driver in the electricity business. It is the passion to end a national deficit and provide the required infrastructure,” he added.
The former minister traced the origin of his commitment to improving electricity supply to an experience in Abuja in 2001, when he led a team of Nigerian engineers to establish an emergency power plant. According to him, the project provided electricity to important government institutions and businesses in the Federal Capital Territory for 28 months without power failure.
He explained that the experience helped him understand the importance of generating electricity close to where it would be consumed, rather than depending entirely on the national grid.
He recalled how the idea of establishing the Aba Integrated Power Project emerged following a visit to Aba in March 2003 by former World Bank President James Wolfensohn and former Finance Minister, Dr Ngozi Okonjo-Iweala. During the visit, manufacturers and business owners complained that irregular and poor-quality electricity was the biggest obstacle to their businesses.
“They told them that the greatest impediment to their operations was irregular and low-quality electricity. That was how the challenge came to me,” Nnaji explained.
He said his decision to take up the challenge was driven by the desire to help businesses in the South-East and other parts of Nigeria overcome the difficulties associated with unreliable electricity.
“If it were just politics, we would perhaps have established an integrated electricity project, not in Aba, but here in Lagos or neighbouring urban states, where the industries are. It is in the national interest that industries in different parts of the country are enabled to thrive,” he said.
Nnaji stressed that concentrating economic development in one part of the country could create serious challenges, adding that every region needed the necessary infrastructure to support its businesses.
One of the major points in his address was the need for electricity distribution companies to move beyond their traditional responsibility of receiving electricity from the national grid and distributing it to consumers.
He maintained that distribution companies should be financially strong enough to invest in generation facilities, build modern substations, upgrade distribution networks and provide dependable electricity directly to the businesses and communities they serve.
Using the Aba experience as an example, he explained that the Geometric Power model combined electricity generation and distribution within a defined geographical area. This allows the company to generate electricity and distribute it to customers without depending entirely on the national grid.
The Aba Integrated Power Project, developed by Geometric Power, comprises a power generation facility and Aba Power Limited, which handles electricity distribution within its designated service area. The project was commissioned in February 2024 and was designed with an expandable generation capacity of 188 megawatts to serve nine local government areas in Abia State.
Nnaji explained that the model could be replicated in other parts of Nigeria, particularly industrial clusters where businesses require stable electricity to remain competitive.
He said Geometric Power did not see itself merely as a company established to maximise profits but as an organisation committed to helping businesses, hospitals, laboratories, schools, markets and other institutions operate effectively.
“At Geometric Power, we do not see ourselves as a team out to make maximum profits. We rather see ourselves as a group dedicated to enabling my country’s firms, hospitals, laboratories, schools and markets, and other stakeholders to do their businesses effectively and efficiently,” he said.
He added that when businesses have reliable electricity, they can increase production, employ more people and contribute meaningfully to national development.
The professor also criticised the poor state of infrastructure in many of Nigeria’s electricity distribution networks, explaining that the original investors were expected to make substantial investments in upgrading the assets they acquired during privatisation.
According to him, buying an electricity distribution company is only the beginning of the investment required to make it functional. Investors must be prepared to replace old equipment, construct new substations, improve transformers and strengthen the distribution network.
He disclosed that Geometric Power had invested considerably in rebuilding the electricity infrastructure in Aba, including the construction of four new substations because the existing facilities could not adequately distribute the electricity being generated.
He challenged other distribution companies to demonstrate similar commitment to infrastructure development.
“That is what those DisCo owners were supposed to do. That is why we say network capacity and financial capacity,” he stated.
Nnaji further explained that distribution companies occupy a critical position in the electricity value chain because they are responsible for collecting payments from consumers. The money collected is expected to support payments to generation companies, transmission operators, gas suppliers, regulators and other participants in the electricity market.
“If the DisCo is inefficient, that is a serious problem in the market, which is exactly what we have today,” he said.
He noted that the inability of many distribution companies to collect revenue efficiently had affected the financial stability of the entire electricity industry.
Another major issue raised by Nnaji was the difficulty of attracting investors into the power sector without a sustainable tariff structure.
He recalled that before the electricity tariff adjustments introduced in 2012, consumers paid approximately N6 per kilowatt-hour. He explained that investors needed assurances that electricity prices would eventually reflect the actual cost of generating, transmitting and distributing power.
According to him, the government had initially considered increasing the tariff to about N22 per kilowatt-hour while reducing the amount paid by low-income rural and urban consumers through a cross-subsidy arrangement.
He explained that the objective was to protect vulnerable households while ensuring that industries and consumers who could afford higher electricity costs paid tariffs that supported the sustainability of the sector.
He warned that where government was unwilling to approve cost-reflective tariffs, it must be prepared to fund the difference through subsidies.
“If there is no approval for cost-reflective tariffs, then government must be prepared to pay for power subsidy. That is just the bottom line,” he said.
Nnaji illustrated the financial burden of electricity subsidies, explaining that even a subsidy of N15 per kilowatt-hour for 5,000 megawatts could amount to approximately N180 billion monthly, or N2.16 trillion annually.
He also pointed out that electricity infrastructure was expensive because most of the equipment used in generation, transmission and distribution was imported, exposing investors to foreign exchange fluctuations.
According to him, the cost of installing one megawatt of a power plant could exceed $1.5 million, making it difficult for investors to undertake projects without adequate financial backing and supportive government policies.
He also identified the absence of adequate government guarantees as one of the factors discouraging investment in new electricity generation projects.
He cited the Partial Risk Guarantee arrangement, which helped support the development of the Azura-Edo power project, as an important instrument for attracting private-sector investment into the industry.
Nnaji argued that Nigeria needed to encourage more investments in power generation because the country’s existing electricity capacity was inadequate for its population and economic ambitions.
He maintained that Nigeria should aspire to generate as much as 100,000 megawatts in the long term if it genuinely wanted to become a major industrial economy.
“You cannot dream of a $1 trillion economy without electricity. It is not achievable without electricity,” he declared.
He also identified natural gas supply as another major challenge, insisting that Nigeria must do more to harness its abundant gas resources for electricity generation.
To demonstrate what reliable electricity can do for businesses, Nnaji pointed to the progress recorded in Aba since the commencement of operations of the Geometric Power project.
He explained that although some customers initially complained about the electricity tariff, many eventually appreciated the value of having dependable electricity available around the clock.
According to him, businesses that previously spent heavily on diesel generators could redirect the money towards production and expansion.
He disclosed that Aba Power charges businesses approximately N240 per kilowatt-hour and residential customers about N290 per kilowatt-hour, according to the figures he presented at the forum.
He added that businesses requiring large volumes of electricity, including those consuming about 1.5 megawatts, could negotiate lower tariffs with the company.
“Once they noticed that power was available 24/7, without blending, and that they no longer had to buy diesel at exorbitant prices, they became happy,” he said.
He further explained that manufacturers were now able to operate multiple shifts and use machines that they previously could not operate because of unreliable electricity.
“Companies that have died or are nearly dying have woken up. New companies are coming to reside within the nine local governments that make up the Aba Power distribution area,” he stated.
According to him, reliable electricity has also contributed to improved security within the Aba business community because businesses and neighbourhoods can operate with better lighting.
He said the experience demonstrated that businesses could survive and expand when electricity was available, even if the tariff appeared expensive at first.
Nnaji also compared electricity prices across different parts of the world, noting that businesses in several countries pay more for electricity than Nigerian consumers but enjoy more reliable supply.
He cited Germany, Ghana, China, Ethiopia and Iran as examples, arguing that the major difference was the availability of electricity and the ability of businesses to plan their operations without constant interruptions.
He stressed that Nigerian manufacturers could compete favourably with their international counterparts if they enjoyed similar access to reliable electricity.
“The price for darkness is infinite, while the price for electricity is finite and manageable with combined effort of government and the private sector,” he said.
Who Is Professor Barth Nnaji?
Professor Barth Nnaji is one of Nigeria’s prominent engineers, academics, entrepreneurs and former government officials. He was born in Enugu State and has built an impressive career spanning engineering, robotics, manufacturing, education and the power sector.
He obtained his first degree in Physics from St John’s University, New York, before proceeding to Virginia Polytechnic Institute and State University, where he earned postgraduate qualifications in engineering. He also undertook postdoctoral studies in artificial intelligence and robotics at the Massachusetts Institute of Technology (MIT).
His academic career took him to the University of Massachusetts Amherst, where he became a professor of Mechanical and Industrial Engineering and established an Automation and Robotics Laboratory. He later served at the University of Pittsburgh as a professor of engineering.
Nnaji first served Nigeria as Minister of Science and Technology in 1993. He later returned to public service as Special Adviser to the President on Power between 2010 and 2011 and Chairman of the Presidential Task Force on Power.
In July 2011, he was appointed Minister of Power under former President Goodluck Jonathan, a position he held until August 2012. During his tenure, he played a significant role in the implementation of the power sector reform programme, including the process that led to the privatisation of the electricity industry.
Beyond government, he founded Geometric Power Limited in 2000, an indigenous power development company established to provide electricity solutions for Nigerian businesses and communities.
One of his earliest major achievements was leading Nigerian engineers in developing an emergency power project in Abuja in 2001. The experience later influenced his vision of developing integrated electricity systems that could generate and distribute power to specific communities and industrial clusters.
His biggest power-sector achievement remains the Aba Integrated Power Project, which took about two decades to develop and required an investment estimated at $800 million. The project includes a gas-fired power plant, gas pipeline infrastructure and an electricity distribution network designed to serve businesses and households in Aba and surrounding communities.
For his contributions to engineering, science and national development, Nnaji has received several recognitions, including the Officer of the Order of the Niger (OON), Commander of the Order of the Niger (CON) and the Nigerian National Order of Merit (NNOM), one of the country’s highest honours for outstanding academic and intellectual achievement.
He currently serves as Chairman and Chief Executive Officer of Geometric Power Limited and Pro-Chancellor of Bells University of Technology.
Concluding his address, Nnaji called on government, private-sector investors and other stakeholders to put national interest above personal interests if Nigeria must overcome its electricity challenges.
He maintained that the country had the natural resources, technical expertise and private-sector capacity required to develop a dependable electricity industry but lacked the consistent leadership and commitment needed to bring these resources together.
He urged leaders to take bold decisions, encourage investment in power infrastructure and create an environment where electricity companies could operate sustainably.
“We have the fuel and abundance to be harvested. We have a talented private sector that can engage to build infrastructure, with the involvement of international investors. We have all of this,” he said.
“The only thing left is that leaders must have the will, the altruistic will, to make it work.”
For Nnaji, the lesson from Aba is that Nigeria does not necessarily have to wait for the national grid to solve every electricity problem. With the right investment, distribution companies can work with generation companies, develop dedicated power infrastructure and provide reliable electricity to the businesses and communities within their operating areas.
He believes that replicating such arrangements across the country, particularly around major industrial and commercial centres, could help reduce the burden of electricity costs on businesses, revive struggling industries, attract new investors and create employment opportunities.
His central message was that reliable electricity is not merely a convenience but one of the most important foundations for business survival, industrialisation and Nigeria’s economic development.
By Benprince Ezeh
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