NIGERIA Trends and Developments Contributed by: Tosin Ajose, Izuchukwu Ubadinma, Deborah Leshi and Precious Omope, DealHQ Partners
studies concluded and a Final Investment Decision anticipated by the end of 2025, the project is posi- tioned as a strategic vehicle for regional energy inte- gration and a competitive alternative supply route for European markets seeking diversification. Nigeria’s power sector decentralisation With the passage of the Electricity Act 2023, Nigeria’s power sector was ushered into a transformative phase – away from a highly centralised market controlled by the federal government towards a state-driven, fully decentralised market. Apart from triggering structural changes across the system, this shift also creates a lot of transactional momentum for consolidations, divestments, partnerships and business combina- tions amongst market participants. Prior to 2023, the Nigerian Electricity Regulatory Commission (NERC) was responsible for licensing, tariff setting and market oversight. The Electricity Act 2023 empowers states to establish a state electricity market, issue licences, set tariffs and regulate the market therein. It is note- worthy that 23 states have since passed enabling laws to regulate their state electricity markets, whilst 13 states have established independent state regulatory boards and actively taken over the regulatory over- sight previously provided by the NERC. The decentralisation of the power sector has become a major enabler for transactions. As new market niches open, market participants are repositioning to take advantage of new market opportunities through acquisitions, sell-downs and other forms of business combinations. M&A activities in the power transmission and distribution subsector Over the past year, the power transmission and dis- tribution subsector has experienced several notable restructuring and investment transactions, driven by the Electricity Act 2023 and ongoing reforms to strengthen grid reliability and expand private sector participation. A flagship example is the proposed acquisition of a 60% stake in Eko Electricity Distribution Company (Eko DisCo) by the Transgrid-Enerco consortium, in a deal valued at about USD200 million. The consortium notably includes North-South Power and Axxela Lim-
ited, signalling a strategic move to integrate genera- tion, fuel supply and distribution. The deal is projected to nearly triple Eko DisCo’s capacity from 513 MW to 1,500 MW, and to integrate renewable energy solu- tions like solar and hydropower. Investments in renewable energy infrastructure Renewable energy infrastructure activities contin- ue to witness remarkable growth, particularly solar power. This is driven by the consistent flow of capital through partnerships between the federal government and Development Finance Institutions (DFIs) such as the African Development Bank (AfDB), international organisations such as the International Solar Alliance (ISA) and strong private sector investment commit- ments. This trend of growing international funding and inves- tor confidence in Nigeria’s renewable energy sector was bolstered by the recent circa EUR100 million clean energy MoU signed by the federal government through the Energy Commission of Nigeria in Octo- ber 2025 with London-based UNIDACO Limited. The agreement was, formalised during the Renewed Hope Global Dialogue – UK Edition at the House of Lords, and will finance the deployment of solar, wind and clean technology infrastructure projects across Nige- ria. Other notable investments over the past year include: • a USD200 million agreement with WeLight, a pan- African Distributed Renewable Energy company, to deploy 400 mini-grids and 50 metro grids to provide electricity to an estimated 1.5–2 million people in Nigeria; • the establishment of a USD500 million Distributed Renewable Energy Fund in partnership with the ISA under a formal Country Partnership Framework to drive nationwide deployment of solar power; • a EUR7.5 million financing initiative by British Inter- national Investment, in collaboration with Odyssey Energy Solutions, to scale mini-grid development in under-served communities across Nigeria; • Sun King’s USD80 million financing round to expand pay as you go solar products to approxi- mately 4 million additional households;
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