New market study, "Nigeria Power Report Q2 2016", has been published

An economic crisis, unorthodox monetary policy and concerns about a devaluation of the naira will deter foreign investment in Nigeria's power sector. This will stall government efforts to plug the power generation deficit with private capital , with investors likely to delay market entry until Nigeria comes to terms with a painful economic adjustment to lower oil prices.

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We believe foreign companies are likely to delay or cancel entering the power market entry amid concerns about opaque power sector policies, a devaluation of the naira and capital controls, while domestic investors will struggle to access funding amid liquidity constraints in the banking sector.

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Further, there is still little concrete power sector policy beyond the points outlined in the APC manifesto. Policy appears to be premised on privatising and securing the financial viability of the sector as a way of improving power supply. However, Babatunde Fashola, the minister of power, works and housing is yet to outline his energy policy in full.

As a consequence of these dynamics we maintain our conservative forecasts for growth in electricity generation and capacity. We forecast electricity generation will grow by an annual average of 4.3% between 2017-2025, following a jump in growth as National Integrated Power Plan (NIPP) projects are brought online in 2016. Gas-fired generation will remain the largest component of the power mix, but growth will be constrained by gas shortages.

At the time of writing, Nigerians have expressed widespread discontent at the 2015 revision of the MYTO2.1. The tariff hike will raise electricity prices by an average of 21% for commercial consumers and 49.9% for residential consumers.

The Nigerian Electricity Regulatory Commission (NERC) appears to be prepared to push ahead with the MYTO revisions despite public protests and labour disputes, legal challenges and efforts in Nigeria's Senate to halt the tariff hike. This creates a huge degree of uncertainty over the efficacy of the tariff hike and whether it can be implemented in full, although it was technically implemented on February 1 2016.

The Nigeria Power Report features BMI Research's market assessment and independent forecasts covering electricity generation (coal, gas, oil, nuclear, hydro and non-hydro renewables), electricity consumption, trade, transmission and distribution losses and electricity generating capacity.

The Nigeria Power Report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing national and multinational operators by sales, market share, investments, projects, partners and expansion strategies.

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