Power Outages Persist as 58% of Hydroelectric Projects Remain Stalled
Nigeria’s power sector continues to struggle with chronic instability, as a recent 2026 sectoral audit reveals that 58 percent of publicly funded dam projects intended for power generation remain stalled or abandoned. Despite the disbursement of hundreds of millions of Naira, these projects have failed to transition from budgetary allocations to operational assets, leaving the national grid vulnerable to frequent collapses. In January 2026 alone, the grid suffered multiple disturbances, including two collapses within a four-day window, underscoring the critical need for the baseload stability that hydroelectricity is designed to provide.
The stagnation in the hydro sector is primarily driven by deep-rooted execution failures and a lack of accountability in project management. Data from the civic monitoring platform Tracka indicates that of the dam projects tracked across 13 states, 25 percent have been abandoned outright, while 37.5 percent have not even commenced despite receiving funding. One of the most egregious examples is the Gwarangah Dam in Bauchi State, which recorded disbursements of N109.9 million despite being officially abandoned. These inefficiencies are compounded by a N4 trillion debt owed to generation companies and a lack of transparency in the utilization of the N432 million recently disbursed for capital projects in this sub-sector.
Economically, the failure to activate these hydroelectric assets imposes a staggering cost on the nation. The World Bank estimates that unreliable electricity costs the Nigerian economy approximately $29 billion annually, which is roughly 10 percent of the projected GDP. Large-scale industrial players and over 20 major firms have already exited the national grid in 2025 to install their own captive power solutions, totaling over 1,045 megawatts of off-grid capacity. For Small and Medium Enterprises (SMEs), the reliance on expensive diesel generators costing Nigerians an estimated N16 trillion in fuel annually—has raised input costs by 40 percent, making local products increasingly uncompetitive.
The 3,050MW Mambilla Hydroelectric Power Project, intended to be the cornerstone of Nigeria’s energy security, remains the most prominent symbol of this stagnation. First conceived over 40 years ago, the $5.8 billion project is currently mired in international legal disputes and arbitration at the International Chamber of Commerce (ICC). While project structuring was expected to reach completion by 2025, the “legal overhang” and the failure of key witnesses to appear in court have pushed the realistic commercial operation date to 2030 at the earliest.
To address these challenges, the federal government is pivoting toward decentralized regulation under the 2023 Electricity Act, which empowers states to generate and distribute their own power. There is also a growing push for small-scale hydropower (SHP) clusters, such as the EU-funded Balanga Dam project in Gombe State, which is scheduled for commissioning in March 2026. Experts suggest that focusing on these smaller, more manageable projects could bypass the bureaucratic and funding hurdles that have frozen larger national assets, providing a more resilient and localized energy architecture for Nigeria’s future.
