Nigeria’s electricity sector could face new supply issues as drought conditions linked to El Niño jeopardize hydropower generation throughout West Africa.

This information is derived from the most recent Sub-Saharan Africa Power & Renewables Report published by BMI, a division of Fitch Solutions.

The report cautions that Nigeria’s reliance on both domestic and imported hydropower renders the nation vulnerable to climate-related disruptions, predicting that by 2026, the market will transition to being a net importer of electricity.

El Niño is a recurring climatic phenomenon marked by unusually elevated sea surface temperatures in the central and eastern Pacific Ocean, often leading to extended droughts in various regions worldwide.
According to BMI, diminished water levels due to El Niño could drastically reduce hydropower production, placing Nigeria at risk of escalating electricity prices and supply uncertainties.

BMI highlighted that past El Niño occurrences resulted in nearly a 25% drop in Nigeria’s hydropower consumption, and the current intensified weather pattern could lead to even more significant losses.
The report stressed that electricity markets heavily reliant on hydropower are the most exposed to this ongoing climate phenomenon, with Nigeria being one of the countries facing heightened risks.

Moreover, Nigeria’s role within the West African Power Pool (WAPP) makes it particularly vulnerable to disruptions stemming from decreased hydropower generation across the region.

While West Africa typically relies less on hydropower than its eastern counterpart, Nigeria’s growing dependence on imported electricity renders it more susceptible to supply disruptions caused by drought.

“The West African Power Pool (WAPP) will face certain risks; however, the overall impact on the pool will be mitigated due to the region’s low reliance on hydropower. Nigeria, within the WAPP, is particularly exposed because of its significant dependence on imports,” the report indicated.

BMI assessed Nigeria’s electricity import dependency at 6.6%, but noted that its link to a hydropower-dependent regional network still leaves it vulnerable to climate-related fluctuations.

“Markets that are heavily reliant on hydropower face the highest risks,” the report continued, highlighting Nigeria, alongside Ethiopia and Sudan, as particularly at-risk markets.

To tackle potential power shortages, BMI forecasts that numerous African nations will increasingly depend on thermal generation and independent power producers (IPPs) in the near future.

The report indicated that countries across the continent are likely to resort to gas, coal, and other traditional energy sources to compensate for the decline in hydropower generation.

For Nigeria, this may strengthen the nation’s current reliance on gas-fired power plants, which already constitute the majority of its electricity output.
In addition to the immediate challenges, BMI highlights that climate-related factors could accelerate investments in renewable energy infrastructure throughout Africa.
The report emphasized solar energy, wind power, distributed generation systems, and hybrid battery storage projects as sectors likely to attract more investment as nations aim to diversify their energy sources and lessen their reliance on rainfall-dependent generation methods.

According to BMI’s projections, total electricity generation in Sub-Saharan Africa is anticipated to increase from 518.7 terawatt-hours (TWh) in 2026 to 570.8 TWh by 2030.
However, the report warned that weak transmission networks, insufficient grid infrastructure, and high financing costs could restrict the extent to which new generation capacity can be transformed into a reliable electricity supply.

Multilateral organizations such as the African Development Bank are expected to play a crucial role in financing renewable energy initiatives, although regulatory hurdles and sluggish funding processes continue to pose significant challenges.

BMI indicated that countries like Nigeria, which are dealing with drought, will depend on thermal energy for a long time. However, climate-related issues are increasingly influencing energy plans across the continent.

It’s clear that moving towards renewable energy is very important; still, how fast this change happens will depend on how well governments can solve structural problems, attract investments, and improve energy systems.

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The findings of the report reflect the concerns that people in the industry have already expressed about Nigeria’s hydroelectric power generation.

Earlier this year, Sunday Oduntan, who is the CEO of the Association of Nigerian Electricity Distributors (ANED), highlighted that the major hydropower plants in Nigeria are not operating at their full potential, leading to frequent power outages in many regions.

Oduntan also noted that electricity distribution companies are increasingly depending on gas-fired power plants to compensate for the lack of hydropower and to ensure a steady supply for consumers.

The most recent BMI report suggests that these issues could get worse if drought conditions related to El Niño continue, adding more pressure on Nigeria’s already weak electricity sector.