The United Kingdom and Nigerian governments are seeking to attract private-sector investment into three small hydropower projects in Oyo, Kano and Plateau states as part of efforts to expand electricity generation and improve power supply to underserved communities.
The initiative is being supported by the United Kingdom’s Partnering for Accelerated Climate Transitions (UK PACT) programme, which focuses on supporting climate-related development and investment opportunities.
The projects being targeted for development and rehabilitation are the Ikere Gorge hydropower project in Oyo State, Ghari Dam in Kano State and the NESCO hydropower cascade in Plateau State.
According to a statement issued on Tuesday, the projects were the focus of an investor roundtable held in Abuja on Wednesday, where policymakers, financiers and project developers discussed strategies for moving them from technical preparation towards financial close.
The meeting provided an opportunity for stakeholders to examine investment opportunities, address financing requirements and identify measures needed to attract private capital into the projects.
The initiative reflects growing efforts by both countries to encourage private-sector participation in Nigeria’s renewable energy industry and improve electricity access in communities that remain underserved by the national power supply network.
Three Hydropower Projects Targeted
The three projects are expected to contribute to Nigeria’s electricity generation capacity through the development and rehabilitation of existing hydropower infrastructure.
The Ikere Gorge project in Oyo State is one of the facilities being considered for investment. Its development could support electricity generation and improve the utilisation of existing water infrastructure.
The Ghari Dam project in Kano State is another facility included in the initiative. Its development is expected to contribute to efforts to expand renewable electricity generation in the state.
In Plateau State, the NESCO hydropower cascade is also being targeted for development and rehabilitation.
Together, the projects represent opportunities to increase the contribution of small hydropower to Nigeria’s energy mix.
Small hydropower facilities can provide electricity by using the movement of water to drive turbines connected to electricity generators. Unlike some other renewable energy sources, hydropower can provide relatively consistent electricity when sufficient water resources are available.
However, successful project development depends on technical assessments, environmental considerations, financing and proper maintenance.
Technical Preparation Supports Investment
The programme is being implemented by Africa PPP Advisory and Ratio Consulting, which have supported preparatory activities aimed at making the projects more attractive to potential investors.
Their work has included feasibility studies, dam safety assessments, environmental and social safeguards, energy audits, financial modelling and transaction structuring.
These activities are important because investors generally require detailed information about the technical and financial viability of infrastructure projects before committing capital.
Feasibility studies help determine whether proposed developments can be successfully implemented, while dam safety assessments examine the condition and operational safety of existing infrastructure.
Environmental and social safeguards are also necessary to identify potential effects on surrounding communities and the environment.
Financial modelling helps stakeholders understand expected costs, revenue possibilities and investment requirements.
Transaction structuring, meanwhile, provides a framework for determining how projects can be financed, developed and managed.
By completing these preparatory activities, the programme seeks to reduce investment uncertainty and improve the chances of securing private-sector financing.
UK Reaffirms Support for Renewable Energy Investment
Speaking at the investor meeting, British Deputy High Commissioner, Vicky Seymour, said the United Kingdom was working with Nigerian partners to attract private capital into renewable energy development.
Her remarks highlighted the importance of international cooperation in addressing infrastructure financing challenges and supporting Nigeria’s transition towards more sustainable energy sources.
The UK PACT programme is part of the United Kingdom’s wider climate cooperation efforts, supporting partner countries in developing projects and policies that contribute to lower-carbon economic growth.
For Nigeria, attracting private investment into hydropower could provide additional financing opportunities at a time when the country is seeking to improve electricity access and strengthen its energy infrastructure.
Private-sector participation can also bring technical expertise, operational experience and financing capacity that may support the successful delivery of infrastructure projects.
Private Investment Remains Important to Nigeria’s Power Sector
Nigeria continues to face electricity supply challenges, with many households and businesses experiencing unreliable access to power.
Insufficient generation, transmission limitations and distribution challenges have affected the ability of the electricity industry to provide consistent supply across the country.
Expanding renewable energy generation is one of the approaches being considered to address these challenges.
Hydropower offers opportunities to utilise existing water resources and infrastructure to generate electricity, particularly in locations where suitable conditions exist.
For businesses and households in underserved communities, additional electricity generation could support economic activities, improve productivity and reduce dependence on expensive alternative energy sources.
However, increasing generation capacity alone will not resolve all the country’s electricity challenges. Adequate transmission and distribution infrastructure will also be required to deliver generated electricity to consumers.
Moving Towards Financial Close
The Abuja investor roundtable represents an important stage in efforts to move the three hydropower projects towards implementation.
Financial close is the stage at which a project has secured the required financing and satisfies the necessary conditions to proceed with implementation.
For the Ikere Gorge, Ghari Dam and NESCO hydropower projects, attracting interested investors and establishing suitable financing arrangements will be important next steps.
Stakeholders will also need to ensure that the projects have appropriate commercial structures, clear regulatory arrangements and effective environmental safeguards.
If successfully implemented, the projects could contribute to Nigeria’s renewable electricity generation capacity while creating opportunities for private investors and local businesses.
The initiative also demonstrates the importance of international partnerships in mobilising capital for infrastructure development.
As Nigeria continues to pursue improved electricity access and energy diversification, cooperation with the United Kingdom and other development partners could help unlock investment opportunities in the renewable energy sector.
The success of the three projects will ultimately depend on the ability of stakeholders to convert technical preparation and investor interest into secured financing and completed infrastructure.
