Analysing Nigeria’s energy transition plan
As Nigeria positions itself for a low-carbon future, the Energy Transition Plan (ETP) offers both hope and a stern test of policy coherence, institutional capacity, and political will. If properly implemented, the Plan could reset Nigeria’s development trajectory; if mismanaged, it risks imposing new burdens on a fragile economy and vulnerable citizens.
When was the plan unveiled, and why it matters
The Government of Nigeria officially launched the Nigeria Energy Transition Plan at COP26 in November 2021, signalling its commitment to achieving net-zero emissions by 2060. This launch marked a turning point: Nigeria’s transition narrative shifted from rhetoric to a concrete roadmap backed by global visibility and national ambition.
Recognising that assumptions evolve and realities shift, the government convened a stakeholder consultation in October 2024, bringing together public and private sector participants to review and refine the original plan. The insights from this process directly informed the development of the updated Nigeria Energy Transition and Investment Plan (NETIP), which integrates more realistic timelines, financing mechanisms, and investment priorities. This iterative approach underscores the seriousness with which Nigeria views the transition: not as a one-off declaration, but as a living framework designed to adapt and deliver.
What is Nigeria’s Energy Transition Plan?
The Energy Transition Plan (ETP) is a comprehensive strategy aimed at balancing emissions reduction and energy access in five key sectors: power, cooking, transport, oil & gas, and industry. It aims to increase renewable energy use, modernise grid infrastructure, deploy energy storage, and use natural gas as a transition fuel. The Energy Transition Office coordinates implementation across ministries and agencies.
Merits: Why the plan matters
1. Tackling energy poverty and supporting development
Nigeria continues to struggle with electricity access and erratic power delivery. The ETP’s design to channel investments into decentralised, off-grid and mini-grid solutions offers a viable path to reach rural and underserved communities. Financing has already been secured for renewable mini-grids to power up to two million people. Reliable, affordable electricity will unlock growth in agriculture, small industry, health, and education.
2. Enhancing climate credibility and attracting capital
In an era when global capital markets favour ESG-compliant investment, Nigeria’s ETP can serve as a signalling device, showing that the country is serious about climate goals. This credibility can help unlock concessional climate finance, green bonds, and multilateral support. By reducing flaring and emissions, Nigeria can also reduce reputational and regulatory risks in its oil & gas sector.
3. Job creation and value-chain development
Transition sectors—solar assembly, grid installation, energy services, battery manufacturing, and energy efficiency retrofits—are potential sources of new employment. Analysts project that scaling renewables plus grid modernisation could yield hundreds of thousands of jobs by 2030. In doing so, the plan nudges financial markets and firms toward a more sustainable culture.
Demerits and risks: Where the plan may falter
1. Huge financing gap
The most formidable challenge is mobilising sufficient capital—both public and private. Historically, Sub-Saharan Africa receives a small share of global climate finance. Nigeria also faces underdeveloped green bond markets, limited incentives, and a banking sector still adapting to sustainable finance. Without bridging that gap, many pathways in the ETP remain aspirational.
2. Weak institutional coordination and policy coherence
Nigeria’s energy, finance, environment and planning agencies often have overlapping or conflicting mandates. The ETP demands strong coordination, but such unity is endangered by bureaucratic silos and shifting political winds. Policy reversals on subsidies, tariffs or land use can destabilise progress.
3. Transition costs to fossil-dependent sectors
Regions and communities dependent on oil and gas revenues are vulnerable. Even though the plan positions gas as a transition fuel, overreliance carries lock-in risks. Displacement of jobs and loss of revenue streams could be severe if alternative livelihoods are not planned and executed.
4. Grid, storage and technology constraints
The intermittency of renewables means grid upgrades and energy storage are nonnegotiable. Without them, reliability will suffer. Studies suggest that adding electricity storage could raise renewables’ share and significantly reduce emissions. Nigeria’s ageing, loss-prone transmission system must be overhauled—a task requiring massive investment, time and technical skill.
How the plan’s actualisation could impact the economy and citizens
If Nigeria can deliver the ETP effectively, the positive ripple effects could be transformative: clean, stable electricity would reduce production costs, attract industrial investment, bolster agricultural productivity, and spur growth in manufacturing and services. Electrification in rural and peri-urban areas would improve livelihoods, healthcare, education and microenterprise capacity, which would help to reduce inequality and boost shared prosperity.
On the fiscal front, success would help diversify Nigeria’s revenue base away from oil rents toward green sectors, carbon services, and energy value chains, aiding fiscal resilience in a low-carbon future. Early transition also cushions the shock of potential stranded assets or weakening global fossil demand.
Yet the transition also carries short-term costs. Tariff reform or subsidy removal may strain household budgets. Fossil-intensive regions will need social safety nets, retraining programmes, and inclusive industrial planning to manage adjustment. Politically, failure to deliver visible gains—reliable electricity, job creation, climate mitigation—would erode trust in government and fuel opposition.
But success could reposition Nigeria as a model continental leader in just energy transition—attracting ESG-sensitive capital, strengthening climate resilience, and aligning national development with global decarbonisation.
Conclusion: Execution is everything
The Energy Transition Plan, launched at COP26 in 2021 and updated after stakeholder consultations in 2024, represents Nigeria’s boldest attempt yet to reconcile development and decarbonisation. But beyond the launches and documents, the ultimate test is execution.
Its success hinges on bold coordination, sustained capital mobilisation, inclusive planning, and institutional discipline. If Nigeria can deliver on the ETP, the payoff is not just lower emissions but a more diversified, resilient, equitable economy and millions of citizens empowered by access to cleaner and reliable energy.
Let us hope this roadmap becomes more than aspirational rhetoric—it becomes the engine of Nigeria’s green future.
Sarah Esangbedo Ajose-Adeogun is the Founder and Managing Partner at Teasoo Consulting Limited, a foremost ESG consulting firm. She is a former Community Content Manager at Shell Petroleum Development Company and served as the Special Adviser on Strategy, Policy, Projects, and Performance Management to the Government of Edo State. She is also the host of the #SarahSpeaks podcast on YouTube @WinningBigWithSarah, where she shares insights on leadership, strategy, and sustainable growth.
