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Africa records hydropower growth but Nigeria still suffers power shortages — Report
Africa added more than 4,200 megawatts (MW) of new hydropower capacity in 2025, making it a fast growing region for hydropower development globally, according to a new report released by the International Hydropower Association (IHA).
The report, 2026 World Hydropower Outlook, said the continent commissioned 4,297 MW of new hydropower capacity during the year, the second consecutive year that additions exceeded 4,000 MW.
The growth was driven largely by the completion of mega projects in Ethiopia and Tanzania, even as more than 90 per cent of Africa’s hydropower potential remains untapped.
The findings come as Nigeria continues to grapple with chronic power shortages, frequent grid collapses and one of the world’s largest electricity access deficits despite possessing significant hydropower resources.
Malcolm Turnbull, president of the International Hydropower Association, said countries are increasingly turning to hydropower and energy storage solutions as they seek reliable electricity supplies amid growing dependence on renewable energy and rising geopolitical uncertainties.
“As electricity systems become more dependent on variable renewables, and geopolitical tensions make reliance on imports more challenging, countries are increasingly recognising the importance of flexibility, long-duration storage and resilient domestic generation. Hydropower and pumped storage are uniquely positioned to provide these services at scale,” he said.
Ethiopia, Tanzania lead Africa’s growth
According to the report, Ethiopia fully inaugurated the 5,000 MW Grand Ethiopian Renaissance Dam (GERD) in 2025, making it the largest power station in Africa.
Tanzania also completed the Julius Nyerere Hydropower Project, a development the report said has substantially reduced the country’s dependence on diesel-powered electricity generation.
The report noted that Africa’s hydropower expansion places the continent at the forefront of global growth in conventional hydropower development.
However, it warned that progress remains far below potential.
“Despite progress, only around 10% of Africa’s hydropower potential has been realised, representing one of the most significant development opportunities in the world, with direct implications for electrification, industrial growth and energy security across a continent growing at twice the global average,” the report stated.
Most projects, it said, remain stalled by financing difficulties, regulatory bottlenecks and delays in securing approvals.
The report also identified weak transmission infrastructure and fragmented electricity networks as major barriers preventing power generated from reaching consumers efficiently.
Nigeria’s modest progress
Nigeria received only a brief mention in the report, which highlighted the rehabilitation of the Kainji Hydroelectric Power Station.
According to the report, the upgrade added 80 MW to the facility, increasing its installed capacity to 600 MW.
The modest increase contrasts sharply with the scale of new investments seen elsewhere on the continent.
Hydropower remains a critical component of Nigeria’s electricity supply. The Kainji, Jebba and Shiroro hydroelectric plants together account for a significant share of power delivered to the national grid.
Yet electricity supply remains inadequate for Africa’s most populous nation.
Data from the Nigerian Electricity Regulatory Commission (NERC) show that while Nigeria’s installed generation capacity exceeds 14,000 MW, actual available generation is significantly lower because of gas constraints, transmission limitations, ageing infrastructure and operational challenges.
The country has also experienced multiple national grid collapses in recent years, highlighting long-standing weaknesses in the electricity value chain.
Energy access challenge
The report arrives at a time when Nigeria is seeking to expand electricity access and reduce dependence on self-generated power.
According to the World Bank, about 86 million Nigerians lack access to electricity, giving the country the largest electricity access deficit in the world.
Businesses and households spend billions of naira annually on diesel and petrol generators to compensate for unreliable grid supply, a situation that raises production costs and constrains economic growth.
Although the 700 MW Zungeru Hydropower Plant has begun contributing electricity to the grid, several proposed hydropower projects across the country have faced delays linked to funding, environmental concerns and implementation challenges.
The IHA report suggests that while Africa is witnessing a resurgence in hydropower development, countries such as Nigeria will require significant investments in generation, transmission and energy storage infrastructure to fully benefit from the continent’s vast renewable energy potential.
The Nigerian National Petroleum Company Limited (NNPC Ltd.) has reiterated its commitment to activating multiple pathways to transform Nigeria into a global gas hub.
According to a statement issued by NNPC’s Chief Corporate Communications Officer, Andy Odeh, the company’s Executive Vice President, Gas, Power & New Energy, Olalekan Ogunleye, disclosed this while speaking at the 2026 Gas Technology & Exhibition Conference (GASTECH) in Bangkok, Thailand, on Monday.
Mr Ogunleye spoke during a panel session themed, “The New LNG Order: Leadership Strategies for Energy Security and Growth.”
He said Nigeria was leveraging its more than 215 trillion cubic feet (tcf) of proven gas reserves to drive domestic industrialisation and expand its export market as geopolitical tensions, conflicts and other factors continue to affect global energy supply and demand.
“Gas development and monetisation from Nigeria’s standpoint is a purely commercial play. NNPC Ltd. is implementing a Gas Master Plan (GMP) engineered as a gap-to-potential tool to move Nigeria from a 215tcf reserves position to above 600tcf,” Mr Ogunleye said.
Gas production targets
According to the statement, Mr Ogunleye said NNPC’s strategy is anchored on stronger coordination under the Petroleum Industry Act (PIA), the Decade of Gas Framework and the Gas Master Plan.
He said the near-term targets are to increase Nigeria’s national gas production to 10 billion standard cubic feet per day (Bcf/d) by 2027 and 12 Bcf/d by 2030.
In January, NNPC unveiled its Gas Master Plan (GMP) 2026, aimed at driving industrialisation and strengthening Nigeria’s energy security.
At the launch, NNPC’s Group Chief Executive Officer, Bayo Ojulari, said Nigeria had about 210 trillion cubic feet (Tcf) of proven gas reserves, with an upside potential of up to 600 Tcf.
He described the resource base as one of the world’s most significant hydrocarbon endowments, saying its development was supported by the Petroleum Industry Act 2021 and the Federal Government’s gas-focused energy transition agenda.
Mr Ojulari said the plan was designed to exceed the presidential mandate of raising national gas production to 10 Bcf/d by 2027 and 12 Bcf/d by 2030.
According to him, the plan is expected to catalyse more than $60 billion in investments across the oil and gas value chain by 2030.
He said the plan prioritises cost optimisation, operational excellence and the systematic conversion of gas resources from 3P to bankable 2P reserves.
The plan also seeks to strengthen gas supply to power generation, Compressed Natural Gas (CNG), Liquefied Petroleum Gas (LPG), Mini-LNG and other critical industrial off-takers.
Mr Ojulari said NNPC adopted a collaborative and investor-centric approach in developing the GMP 2026, with input from industry stakeholders, partners and investors.
LNG expansion
At GASTECH, Mr Ogunleye said Nigeria was already a reliable global gas supplier and was pursuing a major expansion of its LNG capacity.
He cited the Nigeria LNG project’s Trains 1-6, which have a combined production capacity of 22 million tonnes per annum (MTPA) and have exported more than 6,000 LNG cargoes since 1999.
He also cited Train 7, which is scheduled for completion in 2027, as part of the country’s ongoing LNG expansion.
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Mr Ogunleye said Nigeria’s geographical position, which gives it access to both the Atlantic Basin and Asian markets, further strengthens its position as a strategic global gas supplier.
He said this advantage, combined with the country’s substantial gas reserves and renewed national focus on gas development, provides a strong basis for expanding the industry.
According to him, domestic gas utilisation and exports are not mutually exclusive, as Nigeria is pursuing a dual pathway that uses exports to generate foreign exchange while expanding domestic gas use to create jobs, strengthen energy security and improve economic wellbeing.
Mr Ogunleye said Nigeria had also de-risked new LNG projects through a robust legal and regulatory framework backed by attractive fiscal incentives.
“With continued efforts towards stable security, competitive gas pricing and assured gas supply, there is no better time for investors and financiers to participate in the development of Nigeria’s LNG projects confidently,” he said.
GASTECH is a major global conference and exhibition focused on natural gas, LNG, hydrogen and low-carbon solutions.
The 54th edition brings together about 50,000 participants from more than 150 countries, including energy experts, chief executives, policymakers, investors and technology leaders, to discuss energy security, LNG supply, infrastructure investment and decarbonisation.
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Nigerian stocks slid by 1.6 per cent last week, following profit-taking activities across all sectors except oil & gas.
The Insurance Index was worst hit, declining by 5.5 per cent, and remains the only sector index so far this year with a negative yield.
“Stocks with strong earnings, attractive valuations and consistent dividend payouts should also remain in focus,” investment bank United Capital Plc said in a note to investors ahead of the week.
This week, focus will shift to the primary market, where the landmark $1.6 billion initial public offering of Dangote Refinery will be commencing.
PREMIUM TIMES has assembled some stocks with sound fundamentals, adopting rigorous approaches to save you the risk of picking equities at random for investment.
The pick, a product of an analytical market watch, offers a guide to entering the market and taking strategic positions, with the expectation that selected stocks will record reasonable price appreciation with the passage of time.
This is not a buy, sell or hold recommendation but a stock investment guide. You may need to involve your financial advisor before taking investment decisions.
Transnational Corporation (Transcorp)
Transcorp tops this week’s list for its strong fundamentals and for trading below its intrinsic value. The net profit ratio (NPR) of the conglomerate is 24.7, while the price-to-earnings (PE) ratio is 4.5x. Its 10-day relative strength index (RSI) is 31.5.
AXA Mansard
AXA Mansard appears on the pick on the basis of its attractive fundamentals. The NPR of the insurer is 3.4, while the PE ratio is 29.8x, while the RSI is 47.3.
Guaranty Trust Holding Company (GTCO)
GTCO makes the selection for its strong fundamentals and for trading below its intrinsic value. The banking group’s NPR is 37.4, while the PE ratio is 5.4x. Its RSI is 47.8.
ALSO READ: Stanbic IBTC, Mutual Benefits, Aradel top stock picks this week
NPF Microfinance Bank
NPF Microfinance Bank makes the cut for its sound fundamentals. The PE ratio of the micro-lender is 7.2x, while the RSI is 22.5.
Neimeth
Neimeth makes the cut for its sound fundamentals. The NPR of the pharmaceutical company is 12.2, while the PE ratio is 33.2x. The RSI is 40.8.
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