- NERC introduces a N2.17/kWh Transmission Infrastructure Fund to finance critical upgrades without increasing consumer tariffs.
- The fund will support vendor financing and PPPs to address Nigeria’s long-standing transmission network challenges.
- Stakeholders urge strict oversight and transparency to ensure the fund delivers tangible infrastructure improvements.
The Nigerian Electricity Regulatory Commission (NERC) has launched a Transmission Infrastructure Fund (TIF) to improve the country’s power transmission network. The fund will be funded by an N2.17 per kilowatt-hour (kWh) charge for electricity consumed across Nigeria.
NERC unveiled the initiative in the May 2025 Multi-Year Tariff Order (MYTO), released on Tuesday. The commission aims to use the fund to support key transmission projects and introduce innovative solutions in the power sector.
“This Order creates the Transmission Infrastructure Fund to finance essential projects and improve transmission services,” NERC stated.
The commission will manage the fund centrally. It also plans to attract vendor financing and Public-Private Partnerships (PPPs) to close infrastructure gaps.
NERC allocated N2.17/kWh of electricity delivered to grid off-takers toward building the TIF in 2025.
Despite the new market charge, NERC kept electricity tariffs unchanged for May. Band A customers will continue to pay N209.5/kWh. Bands B to E will maintain the frozen tariffs introduced in December 2022.
NERC clarified that consumers will not pay more due to the new charge. The electricity market will absorb the cost internally.
Adetayo Adegbemle, Executive Director of PowerUp Nigeria, supported the initiative. He compared the TIF to the Meter Acquisition Fund introduced in earlier MYTO frameworks.
“This works like the contributory pension scheme,” he told Vanguard. Consumers won’t see changes in their electricity bills. Market operators will contribute N2.17.”
Adegbemle urged the commission to focus on managing the fund properly.
“Funding isn’t the issue,” he said. “The real challenge lies in how NERC will administer it.”
He noted that the fund could help the market raise long-term capital to upgrade the grid.
“If NERC manages this well, the fund can significantly improve transmission capacity,” he said.
He warned that poor management could undermine the initiative. “NERC must direct the money to real infrastructure projects that improve the grid,” he said.
Many analysts believe the fund could fast-track long-overdue upgrades. Nigeria’s transmission system has long struggled with limited capacity and frequent outages.
Power generation often exceeds what the transmission network can carry. As a result, many power plants operate below capacity.
Experts emphasise the need for focused investment. They argue that the TIF provides a sustainable way to address the country’s transmission challenges.
NERC’s decision reflects its strategy to attract investment without immediately raising electricity tariffs. This approach may reduce public backlash from consumers facing economic pressure.
The TIF joins a series of power sector reforms by the federal government. Officials hope the new fund will help improve electricity access and reliability nationwide.
As implementation begins, stakeholders demand transparency and accountability. Many industry watchers insist NERC must prioritise projects that deliver real impact.
Consumers may not pay more now, but power sector players must ensure the fund drives real improvements, not more bureaucracy.