Nigeria’s energy sector reached a turning point in 2025 as long-delayed gas projects, state-led power reforms, and local fuel refining reshaped how the country produces and uses energy.
After years of missed targets, the completion of major infrastructure and new laws shifted the sector from promise to delivery, even as the national grid remained fragile.
The biggest milestone was the near-completion of the $2.8 billion Ajaokuta-Kaduna-Kano (AKK) gas pipeline. The 614-kilometre project is designed to move gas from southern fields to northern industrial centres.
In April and May, engineers completed the long-delayed River Niger crossing, a key technical hurdle. On December 28, Nigerian National Petroleum Company Limited (NNPCL) Group Chief Executive Bashir Ojulari confirmed that welding on the main pipeline had been completed.
“The AKK pipeline is the industrial backbone for the North,” Ojulari said. “It will support power plants, fertiliser factories, and new industries from Abuja to Kano.”
Gas deliveries are expected to begin in early 2026.
At the same time, Nigeria’s power sector began to break away from decades of federal control. The Electricity Act of 2023 took practical effect in 2025, allowing states to regulate electricity markets within their borders.
In the first quarter, the Nigerian Independent System Operator was unbundled from the Transmission Company of Nigeria, creating a neutral body to manage grid operations.
By mid-year, at least eight states, including Lagos, Enugu, and Ogun, had launched full electricity regulators. By December, that number had risen to ten. These reforms allow states to move faster and respond directly to consumers.
Enugu State set a key precedent when its electricity distributor created a subsidiary regulated only by the state. The move allowed local authorities to sanction overbilling more quickly than under federal oversight.
Renewable energy also moved from backup power to core infrastructure in 2025.
The World Bank-backed Distributed Access through Renewable Energy Scale-up project launched in the third quarter. It aims to provide electricity to 17.5 million Nigerians through 1,350 mini-grids.
Private investment followed. Nigerian Breweries and the Lagos Free Zone completed solar-hybrid plants to power manufacturing sites. In the north, a 7-megawatt solar plant was commissioned at Aminu Kano Teaching Hospital, one of the country’s largest public health facilities.
In October, the Energy Commission of Nigeria signed a €100 million agreement in London to expand solar manufacturing and deployment nationwide.
Oil and gas production also showed resilience. Improved security in the Niger Delta helped crude output rise to 1.71 million barrels per day in July, the highest level in years. Regulators awarded new oil blocks and flare-to-value gas projects to reduce waste and boost supply.
The Dangote Refinery emerged as a central force in the economy. By January 2025, it reached full commercial production of petrol. Nigeria’s fuel import bill fell from $2.6 billion in the first quarter of 2024 to $1.2 billion a year later.
By year-end, the refinery supplied about 22 million litres of petrol daily, meeting roughly 44% of national demand. Exports of jet fuel and naphtha began reaching Europe and the United States.
Despite these gains, the national grid remained unstable. Power generation peaked at 5,543 megawatts in February, but the grid collapsed four times during the year, including on December 29.
Those failures pushed businesses and wealthy households to invest in off-grid solar and storage systems, reinforcing a new reality; Nigeria’s energy future is becoming more local, more diversified, and less dependent on a single grid.
Read also: Nigeria sees diesel price relief as cost falls to N1,409.61
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