The Nigerian Electricity Regulatory Commission (NERC) has introduced a new Transmission Infrastructure Fund (TIF) to improve the country’s electricity network.
The TIF will be funded through a ₦2.17 charge on every kilowatt-hour (kWh) of electricity consumed.
This is part of the May 2025 Multi-Year Tariff Order (MYTO), released on Tuesday.
According to NERC, the TIF will help finance key power transmission projects and encourage innovation in Nigeria’s electricity sector.
“This Order (MYTO May 2025) provides for the establishment of a Transmission Infrastructure Fund to support the financing of essential transmission infrastructure projects and innovative initiatives needed to enhance transmission services within the Nigerian Electricity Supply Industry (NESI),” the commission stated.
Fund to Attract Private Partnerships and Secure Project Financing
NERC explained that the fund will be centrally managed and will not be handled directly by distribution companies.
It can be used to attract vendor financing and partnerships under the Public-Private Partnership (PPP) model. This will help fill the long-standing infrastructure gap in the national grid.
“A provision of ₦2.17/kWh of energy delivered to grid off-takers has been made as a contribution toward building the TIF in 2025,” NERC added.
The idea is to create a reliable pool of funds that can support large-scale investments in Nigeria’s transmission infrastructure.
Currently, poor transmission remains one of the main causes of power outages in many parts of the country.
With improved transmission lines, transformers, and substations, Nigerians could benefit from a more stable electricity supply.
Tariffs Remain Unchanged Despite New Fund
The new TIF charge will not affect what customers currently pay for electricity.
NERC has retained the existing tariff rates for the month of May. Customers in Band A will continue paying ₦209.5/kWh, while Bands B to E will remain on frozen tariffs set since December 2022.
PowerUp Nigeria Executive Director, Adetayo Adegbemle, said customers should not worry about paying extra.
“Think of it like the Meter Acquisition Fund, which was introduced into the MYTO by NERC without changing the tariff payable by consumers,” he said.
According to him, the ₦2.17/kWh will be raised through market contributions in a way similar to the pension scheme.
Experts Urge Transparent Use of the TIF
Adegbemle stressed the importance of managing the fund well.
“I strongly believe it will enhance the market’s capacity to improve transmission infrastructure by accumulating significant capital for the sector, just like the Meter Acquisition Fund has done,” he said.
He also warned that the real challenge will be ensuring the fund is used correctly.
“The key challenge is in the implementation and administration of the fund. Investments must be directed at projects that genuinely enhance transmission infrastructure,” he added.
Industry observers believe that if well-managed, the TIF could help address the country’s acute power challenges and support future growth in electricity supply.
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