The Nigerian government has proposed a significant allocation of 1.096 trillion for capital electricity projects in the 2026 appropriation bill, aiming to address the country’s long-standing power sector challenges. Nigeria’s power sector has struggled with inadequate generation capacity, transmission bottlenecks, and distribution inefficiencies for decades.
According to the 2026 Appropriation Bill, the Rural Electrification Agency (REA) has been allocated the highest amount of 502.21 billion, while the Federal Ministry of Power has been allocated 416.748 billion for capital projects. The ministry’s headquarters has earmarked 987.932 million for the provision of basic amenities for project-affected communities, including schools, solar boreholes, roads, and health centers.
The government also plans to spend 840 million on ongoing distribution expansion program projects to utilize stranded power from the grid, with each of the six regions receiving 400 million. Additionally, 350 million has been allocated to complete the rehabilitation of the Aliameh injection substation in Agbor, and 280 million for the construction of a power mini-grid at Delta University.
The budget also reveals significant spending on electricity and diesel across various ministries, departments, and agencies (MDAs). The Ministry of Defence leads with an allocation of 16.16 billion for electricity, followed by the Federal Ministry of Health and Social Welfare with 9.43 billion, and the Federal Ministry of Education with 8.23 billion.
The heavy spending on diesel highlights the continued dependence on generators due to unstable grid supply. The Ministry of Health and Social Welfare tops diesel expenditure with 8.29 billion, followed by the Ministry of Defence at 6.6 billion, and the Ministry of Education at 5.75 billion.
The proposed allocation for electricity projects is a significant step towards addressing the country’s power sector challenges. In 2025, the Federal Government issued the first bond under the Presidential Power Sector Debt Reduction Programme, marking a major effort to address longstanding payment arrears in Nigeria’s electricity industry. The successful implementation of these projects and initiatives will be crucial in improving the country’s power supply and driving economic growth.
