Nigeria, Ghana Face Test of Turning Energy Policies Into Reliable Power

On paper, Nigeria and Ghana have put many of the building blocks for an energy transition in place.

Nigeria has a Climate Change Act, an Electricity Act, an Energy Transition Plan targeting net zero by 2060 and an updated Nationally Determined Contribution (NDC). By July 2026, 16 states had also taken over the regulation of their intrastate electricity markets.

Ghana, meanwhile, has a Renewable Energy Act, energy-efficiency laws, an updated NDC containing 47 programmes and a Ministry of Energy and Green Transition.

The frameworks exist. The agencies are in place. The harder question now is whether the institutions, financing and political will can turn those policies into reliable and affordable electricity.

That challenge is particularly significant because both countries are trying to expand power access, increase renewable energy, reduce emissions and protect consumers while dealing with ageing infrastructure, debt, fossil-fuel dependence and limited fiscal space.

Nigeria’s Energy Transition Plan estimates that about $410 billion in additional investment above business-as-usual levels will be required between 2021 and 2060.

The plan identifies an initial investment pipeline of about $23 billion, with roughly $17 billion expected to come from private investors.

The challenge, therefore, has shifted from developing policies to implementing them and mobilising the capital needed to deliver projects.

Nigeria’s Climate Change Act 2021 provides a legal framework for coordinating climate action, while the Electricity Act 2023 opened the door for states to regulate their electricity markets and allowed greater participation in decentralised and renewable power generation.

By July 2026, 16 states had fully transitioned to regulating their intrastate electricity markets.

However, decentralisation also creates new responsibilities. State regulators must be able to enforce standards, attract investment and protect consumers as new electricity markets develop.

The effectiveness of the reforms will ultimately depend on whether they improve electricity access and reliability for households and businesses.

Nigeria’s updated NDC targets a 20 per cent reduction in emissions below business-as-usual levels by 2030 using domestic resources. With international support, the target rises to 47 per cent.

The Energy Transition Plan links those climate ambitions to sectors including electricity, cooking, transportation, industry and oil and gas.

But delivering the plan requires coordination among multiple institutions.

The Ministry of Power and the Nigerian Electricity Regulatory Commission set key rules for the electricity sector, while the Rural Electrification Agency focuses on expanding access to underserved communities.

The Ministry of Petroleum Resources and NNPC Ltd remain important to the country’s energy system because oil and gas will continue to play a role during the transition.

The Nigerian Content Development and Monitoring Board also has responsibilities around local participation and industry development, while the National Council on Climate Change provides a broader climate policy framework.

With so many institutions involved, coordination remains critical. Projects and policies developed in isolation may not produce the system-wide improvements required.

Ghana faces a similar challenge.

Its Renewable Energy Act and subsequent amendments created mechanisms including competitive procurement, net metering and energy-efficiency standards. Its updated NDC contains 47 adaptation and mitigation programmes covering 19 areas.

The country also has several institutions with distinct roles across the energy sector.

The Ministry of Energy and Green Transition sets policy, while the Energy Commission regulates and promotes renewable energy. The Public Utilities Regulatory Commission is responsible for balancing affordability with the financial sustainability of utilities.

The Volta River Authority generates electricity, while the Electricity Company of Ghana distributes power to consumers.

The effectiveness of Ghana’s energy transition will therefore depend not only on expanding renewable generation but also on the ability of institutions across the electricity value chain to operate sustainably.

The financial pressure is already significant.

In January 2026, the Ghanaian government said it had paid $1.47 billion in 2025 to clear energy-sector debts and restore a World Bank guarantee, with payments going to independent power producers and fuel suppliers.

The debt settlement was aimed at stabilising the existing electricity system, but it also highlights the financial constraints facing the sector.

Both Nigeria and Ghana will need substantial private investment to complement government resources.

Solar companies, independent power producers, banks and energy firms can provide capital and expertise, but investors also require predictable policies, credible institutions and commercially viable projects.

Where governments provide guarantees, subsidies, tax incentives or concessional financing, transparency over the use of public resources remains important.

Questions around how much money is approved, how much is actually disbursed, who receives it and what projects deliver in return are central to assessing the effectiveness of energy-transition spending.

Civil society and community organisations also have a role to play by scrutinising projects, raising concerns about affordability and ensuring affected communities are consulted.

A renewable-energy project, for example, still needs to account for its impact on communities, land use, livelihoods and consumer costs.

International development partners can also provide financing, guarantees and technical assistance. But climate finance commitments need to be distinguished from actual disbursements.

A grant, loan and guarantee have different implications for governments and consumers, making transparency around the terms and use of funds essential.

Nigeria’s estimated $410 billion transition requirement cannot be financed entirely from government budgets. The Energy Transition Plan envisages a combination of commercial investment, concessional loans, development finance and blended financing.

Ghana is similarly looking to climate funds, private capital, blended finance and carbon-market mechanisms to support its transition.

For both countries, one practical measure of progress is whether the public can trace funding from commitment to project and, ultimately, to measurable outcomes.

How much was approved? How much was released? What was the money intended to deliver? Was the project completed? How much electricity is being generated? What did consumers pay? How many jobs were created?

These questions are especially important when distinguishing between transition finance and expenditure needed simply to keep existing systems running.

Ghana’s $1.47 billion debt payment, for instance, was aimed at resolving existing energy-sector liabilities. It is different from financing new renewable infrastructure or other long-term transition projects.

Nigeria and Ghana have established many of the policies and institutions needed to guide their energy transitions.

The next stage is implementation.

The success of that process will ultimately be visible in classrooms able to run computers throughout the day, hospitals relying less on diesel generators, factories operating with greater certainty and rural communities gaining reliable electricity.

It will also depend on whether workers affected by changes in the energy system can access new opportunities and whether consumers can afford the electricity being generated.

The policies and investment targets provide a framework. Their impact will depend on how effectively the two countries turn those commitments into functioning infrastructure, sustainable financing and reliable power.