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Policy & Regulation

Nigerian discos go off grid in search of profit

Nigeria has set its electricity tariffs so low that distributors are saying they are unable to turn a profit, leaving them searching for alternatives Nigeria has set its electricity tariffs so low that distributors are saying they are unable to turn a profit, leaving them searching for alternatives
By Miriam Malek 15 June 2017 Middle East & Africa / Policy & Regulation 0 26382
Construction of the Azura-Edo IPP in Nigeria. The country’s utilites are struggling with low tariffs. (Azura Power)

Nigeria’s utilities are looking to boost their revenues by selling power off-grid as they are hamstrung by low state-set electricity prices, which have made it impossible for them to turn a profit.

The Nigerian government has capped electricity tariffs in the country, and although distribution companies – known as ‘discos’ – are adopting the maximum price possible, they say it is still too low for them to break even. The severe depreciation in the value of the naira this year has effectively wiped out any gains...