31% availability, a 100 MW off-grid AI campus, and Nigeria's crude windfall
Nigeria's power sector nudged upward in April 2026. The Plant Availability Factor rose to 31%, from 30% in March, as available generation reached 4,286 MW, a 5% improvement month on month (NERC April 2026 Operational Factsheet). Grid voltage remained below the minimum operating threshold at 302.60 kV against a required 313.50 kV, and frequency continued to breach the safe band of 49.75 to 50.25 Hz in both directions. The improvement is real and directionally welcome. It does not alter the structural picture.
In the same month, Kasi Cloud commissioned LOS1, the first hyperscale AI data centre campus in West Africa, at 100 MW in the Lekki Free Zone, Lagos. The campus runs on a hybrid architecture of gas, solar, and battery storage, bypassing the national grid entirely. The same month, the Federal Government removed a 5% import duty on electric vehicles, a signal of shifting policy posture, and Nigeria's crude oil output rose to 1.66 million barrels per day in April, its strongest performance in years, lifted by Brent at $126 per barrel on Strait of Hormuz disruption.
The BMI projects an additional ₦6.8 trillion in government oil income this year from the price shock. NBS data released on 25 May confirms the wider economic picture: GDP grew 3.89% year on year in Q1 2026, up from 3.13% a year earlier, but Q1 crude production averaged just 1.55 mbpd, below the 1.62 mbpd recorded in Q1 2025. The electricity sector contracted by 15.30% in real terms. That revenue is available to the same government whose national grid delivered 4,286 MW to 230 million people in April, and whose national EV charging network totals fewer than 20 publicly accessible stations.
The 5% PAF improvement is the first positive monthly move in six months. If maintained through May and June it signals stabilisation rather than structural repair. The Kasi Cloud commissioning is more significant as a statement about Nigeria's grid than about AI infrastructure: the largest new power load in Lagos this year chose to build entirely off-grid. The crude windfall creates the fiscal space to address structural constraints. Whether it will be used that way is the question that will define this government's energy legacy.
April 2026 Grid Performance at a Glance
The Power Pulse tracks the indicators that matter most for Nigerian grid performance and investability. They answer three questions: how much capacity is actually usable, what is constraining dispatch, and whether the commercial chain can pay for it.
Generation Mix · April 2026
Gas Supply Gap · Daily Delivery
Voltage · April 2026
Below-threshold voltage throughout April increases equipment stress and reduces usable capacity from connected loads.
Frequency · April 2026
Frequency operated outside the safe band on both sides throughout April 2026, consistent with the pattern preceding January grid collapses.
| DisCo | Energy Allocation (MWh) | Collection (₦ bn) | Efficiency |
|---|---|---|---|
| Ikeja | 545,120 | 54.20 | 81% |
| Eko | 466,890 | 48.65 | 79% |
| Abuja | 438,200 | 42.10 | 76% |
| Ibadan | 412,305 | 28.40 | 58% |
| Port Harcourt | 288,710 | 19.80 | 54% |
| Benin | 265,480 | 17.30 | 52% |
| Enugu | 240,160 | 14.50 | 48% |
| Yola | 98,300 | 5.10 | 44% |
| Kaduna | 145,720 | 6.44 | 42% |
| Kano | 132,890 | 5.60 | 39% |
| Jos | 108,540 | 4.10 | 37% |
Southern DisCos carry the sector. The four northern DisCos (Jos, Kano, Kaduna, Yola) all record collection efficiency below 45%. AKK pipeline commissioning in July 2026 may improve northern supply and collection prospects. Source: NERC Commercial Performance Factsheet Q4 2025.
The April uptick to 31% PAF is meaningful because it is the first in six months and coincides with early disbursements from the ₦3.3 trillion GenCo settlement. It does not change the structural picture: 69% of installed capacity remains unavailable, voltage sits below minimum operating thresholds, frequency continues to breach safe limits in both directions, and gas supply covers only 43% of thermal requirements. The Kasi Cloud commissioning this month is the clearest single signal of where this leaves large-scale power users: building entirely around the grid rather than relying on it.
The Kasi Cloud moment: Nigeria's AI ambition meets its grid arithmetic
Nigeria's Energy Transition Plan commits to net zero by 2060 (Federal Ministry of Environment, ETP 2022). The pathway requires total electricity generation to rise roughly sixfold, renewable share to reach 82% by 2050, and universal electrification by 2030.
April 2026 brought a data point that illustrates exactly how far current reality sits from that trajectory. Kasi Cloud commissioned LOS1, the first hyperscale AI data centre campus in West Africa, at a stated capacity of 100 MW in the Lekki Free Zone. The facility was built with its own integrated power system combining gas generation, rooftop solar, and battery storage. It does not draw primary supply from the national grid. The decision is not a comment on ambition: it is an arithmetic response to a grid that delivers 31% of installed capacity with voltage and frequency operating outside prescribed safety limits.
The parallel with Kenya is direct. President Ruto cancelled the Microsoft and G42 Olkaria data centre in April on the grounds that a facility drawing up to 1 GW on a 3,000 MW national grid was arithmetically incompatible with serving existing demand. Lagos avoided the same cancellation by building around the constraint. The outcome is the same: Nigeria's AI infrastructure ambitions sit on a private power island, not a public grid.
The EV duty removal issued this month sits in a different part of the 2060 trajectory. Nigeria's ETP requires electric vehicles to constitute the majority of new vehicle registrations by 2040. Removing a 5% import duty is the first materially pro-EV fiscal signal from the Federal Government, but it operates against a backdrop of fewer than 20 public charging stations in a country of 230 million people and a grid that cannot reliably power large commercial loads. The duty removal changes the import equation for EV vendors. It does not change the energy infrastructure equation for EV users.
The Kasi Cloud off-grid model validates the investment case for integrated power systems serving large commercial and industrial loads in Nigeria. Every data centre, industrial park, or logistics hub that follows this model represents a PPA opportunity for C&I solar-plus-storage developers outside the DisCo franchise structure.
If hyperscale AI infrastructure systematically builds off-grid, the fiscal and regulatory case for grid improvement weakens further as large taxpaying entities exit the customer base. The NERC tariff review approaching in Q3 2026 is now set against accelerating customer defection from the grid, not stabilising demand.
Nigeria's 2060 trajectory requires the national grid to become the platform for economic electrification. The April 2026 picture shows the country's largest new power project bypassing it entirely, its crude windfall flowing without a committed investment pathway to generation, and its EV policy removing import duties against an infrastructure base of fewer than 20 charging stations. The direction is not irreversible. But the gap between target and trajectory is widening, not narrowing, and it is doing so visibly, in a single month, in a single city.
Six named entities shaping Nigeria's energy and infrastructure picture in May 2026
Kasi Cloud · Lekki Free Zone, Lagos
Commissioned West Africa's first hyperscale AI data centre campus in April 2026 at a stated Phase 1 capacity of 100 MW. The facility integrates gas generation, rooftop solar, and battery storage into a hybrid system designed to meet the uninterruptible power requirements of GPU cluster operations at scale. Kasi Cloud is the entity that demonstrated most clearly this month that large-scale AI infrastructure investment in Nigeria is viable, and that it will be viable in spite of the national grid rather than because of it. Phase 2 capacity and timeline remain undisclosed. The key watch point is whether Phase 2 attempts grid integration via a generation PPA or remains fully isolated.
NNPC / NUPRC · Nigerian crude production
Nigeria's crude output reached 1.66 million barrels per day in April 2026, the strongest performance in recent years, driven by improved security conditions in the Niger Delta and production restoration at offshore fields. At Brent above $126 per barrel, this translates to substantial export revenue gains. The BMI projects an additional ₦6.8 trillion in government oil income this year versus budget assumptions based on lower price expectations. NUPRC has attributed the production improvement to a combination of community engagement initiatives, pipeline monitoring, and improved operator compliance. The sustainability of the recovery through Q3 2026 depends on whether the security and operational conditions that enabled it hold.
EV importers responding to the duty removal
The Federal Government's removal of the 5% import duty on electric vehicles in May 2026 changes the landed cost structure for EV importers in Nigeria. The market is currently served by a small number of operators, including Stallion Group, QORAY, and several smaller importers, with a combined installed base of fewer than 5,000 registered EVs. The duty removal is expected to reduce retail prices modestly and potentially attract new entrants, including Chinese OEMs such as BYD and Chery that have moved aggressively into other African markets on price. The constraint on scale is not price. It is infrastructure and grid reliability. Nigeria has fewer than 20 publicly accessible fast-charging stations. That number needs to be in the hundreds before volume EV adoption is structurally viable.
Geometric Power · Aba, Abia State
Continues to operate its 188 MW embedded generation and distribution system serving approximately 900,000 people in Aba, independent of the national grid. The system ran without disruption through the April grid instability period, reinforcing the model's value proposition. Geometric is the longest-running proof of concept for vertically integrated, islanded power as a viable alternative to grid dependence in Nigeria and the direct antecedent of the Kasi Cloud model now being deployed for AI infrastructure.
The restoration of the Alaoji Power Station this month creates an important distinction within Aba itself. Alaoji feeds the national grid. Geometric Power feeds its own ring-fence. The ~900,000 people and businesses on the Geometric island see no change from Alaoji's return. The parts of Aba still connected to the national grid through Enugu DisCo stand to benefit from improved grid supply as the Alaoji output propagates through TCN. Aba now has two power realities in the same city.
NDPHC / Alaoji Power Station · Aba, Abia State
The Niger Delta Power Holding Company restored the 450 MW Alaoji Power Station in Abia State in May 2026 after a three-year shutdown caused by a gas supply dispute with TotalEnergies and accumulated unpaid obligations. NDPHC cleared all arrears, repaired defective gas lines, and completed electromechanical rehabilitation on three units (GT1, GT22, GT23), returning 375 MW to the national grid. Governor Alex Otti has confirmed discussions are under way to wheel power directly from Alaoji to the eight local government areas of Abia State outside the existing Aba ring-fence corridor, and to Umuahia. Expansion to 800 MW and eventually 1,100 MW is planned subject to funding. The Alaoji restoration is the largest single public-sector generation addition to the national grid in 2026 to date and represents an 8.7% increase in national available capacity against the April 2026 baseline of 4,286 MW.
Lightrock · $500 million clean energy fund
LGT Group-backed impact investor Lightrock launched a $500 million clean energy fund targeting companies in Africa and Asia in May 2026. The fund's Africa allocation is not yet disclosed, but Lightrock's existing sub-Saharan portfolio and the fund's growth equity positioning, above DFI seed capital and below infrastructure debt, places it at precisely the stage where Nigerian energy companies most frequently cite the financing gap. The fund is the largest pure-play clean energy mandate currently active in the African market by announced size. First close timeline and country allocation will be the watch points in Q3 2026.
The executing stack is clearer this month than it was three months ago: integrated off-grid power for large industrial and commercial loads (Kasi Cloud model), distributed C&I solar-plus-storage, and growth equity for scaling operators (Lightrock target). Utility-scale grid-connected projects remain capital-gated by DisCo creditworthiness and gas supply uncertainty.
Nigeria's crude windfall gives the Federal Government the fiscal space to address structural grid constraints for the first time in years. Whether that space is used for grid investment or absorbed into the broader fiscal position will be determined by budget decisions in Q3 and Q4 2026. There is no policy signal yet that grid investment is the priority use.
Execution in Nigeria's energy sector this month runs on two tracks, though the picture is more complex than a simple public-private divide. The private sector is building around the grid: Kasi Cloud off-grid in Lagos, Geometric Power islanded in Aba. The public sector has removed an EV import duty, received a crude windfall, and with the Alaoji restoration delivered the largest single generation addition to the national grid in 2026. Whether the Alaoji event is a one-off rehabilitation or the beginning of a sustained NDPHC recommissioning programme across its stranded fleet will determine the sector's trajectory. If the windfall funds that programme alongside AKK commissioning and DisCo restructuring, the two tracks can converge. If it does not, the gap between them widens further and the Kasi Cloud model becomes the template for every significant new energy load in the country for the rest of the decade.
What a tariff increase can and cannot fix
The NERC tariff review, the EV duty removal, and the oil windfall arithmetic
The NERC tariff review
NERC's next scheduled electricity tariff review is expected in Q3 2026. The review follows a period in which DisCos have continued to underperform on billing efficiency, with Ibadan, Port Harcourt, Benin, and Enugu all recording efficiency below 60% in Q4 2025, and the four northern DisCos sitting below 45%. A PwC analysis published in April reinforced what the numbers already show: Nigeria's electricity reform programme requires clearer regulatory frameworks and stronger coordination between federal and state authorities before tariff increases can translate into supply improvements. The gap between NERC's federal tariff authority and the emerging state-level electricity market structures creates regulatory ambiguity that deters private investment at the distribution level.
A tariff increase in this environment raises a direct question that the Editor's Brief in this issue identified as the primary watch point: whether the next increase comes with improved supply guarantees or just a higher bill. If customers pay more for 4,286 MW of available generation delivered below minimum voltage thresholds, the political durability of the increase is low and DisCo collection efficiency is unlikely to improve.
The EV duty removal
The Federal Government's removal of the 5% import duty on electric vehicles in May 2026 is the first materially pro-EV fiscal measure since the National EV Policy of 2023. The duty removal reduces landed costs for EV importers and creates space for competitive pricing in a market currently dominated by early adopters and fleet operators. It does not address the two binding constraints on mass market EV adoption: a public charging infrastructure base of fewer than 20 stations nationally, and an electricity grid that operates below minimum voltage and frequency standards. For comparison, Ethiopia built out four fast-charging hubs in Addis Ababa alone, covering 60 vehicles simultaneously, before its EV penetration rate crossed 60% of new registrations. Nigeria's infrastructure gap is orders of magnitude larger relative to its population and geography.
The oil windfall and the infrastructure investment question
Brent above $126 per barrel combined with Nigerian crude output at 1.66 mbpd in April generates a material fiscal surplus versus budget assumptions. NBS data released on 25 May confirms the broader economic backdrop: Nigeria's GDP grew 3.89% year on year in Q1 2026, up from 3.13% in Q1 2025. The oil sector contributed 3.92% to total real GDP, marginally below the 3.97% a year earlier. Average daily production in Q1 was 1.55 mbpd, lower than the 1.62 mbpd recorded in Q1 2025. The electricity, gas, steam and air conditioning supply sector contracted sharply, recording a real growth rate of negative 15.30%. That contraction alongside GDP growth confirms what the grid availability data already shows: the economy is growing around and despite the power sector, not because of it.
The BMI projects an additional ₦6.8 trillion in government oil income this year. The Petroleum Industry Act (2021) mandates that 30% of NNPC profit oil flows to a Host Community Development Trust and that capital investment in upstream infrastructure continues. Neither requirement directs windfall revenue to power sector infrastructure. Whether the Federal Government deploys a portion of the surplus toward the AKK pipeline completion (scheduled July 2026 but at risk of slippage), TCN transmission investment, or DisCo restructuring is the fiscal policy question that will determine the sector's trajectory through 2027.
The $717.7 million World Bank cancellation
Nigeria cancelled $717.7 million in undisbursed World Bank funding on 26 May 2026, ending the remaining balance of the Power Sector Recovery Performance-Based Operation (PSRO). The Federal Government formally requested the cancellation on 26 March. The World Bank agreed, and the programme's closing date was brought forward from June 2027 to May 2026 (Nairametrics, Channels Television, 26 May 2026).
Total PSRO commitments stood at approximately $1.51 billion across the IBRD and IDA windows. Of that, roughly $796 million had been disbursed before cancellation. The original programme, approved in June 2020, recorded measurable gains: tariff shortfalls fell by approximately 71% between 2019 and 2022, from about ₦581 billion to ₦166 billion. But after additional financing of $750 million was approved in June 2023, the sector's financial position deteriorated sharply. Only 9% of the additional funding was released before the plug was pulled.
The World Bank attributed the collapse to two factors. First, the naira devaluation and foreign exchange reforms of 2023 increased generation costs because gas pricing is dollar-denominated, while tariffs remained frozen for most consumers except Band A customers, whose rates were adjusted in April 2024. Annual tariff shortfalls surged from ₦140 billion in 2022 to approximately ₦1.9 trillion in 2024 and 2025. Second, the absence of a credible financing framework for addressing those shortfalls prevented Nigeria from meeting critical performance indicators between 2023 and 2025.
The Accountant-General, Dr Shamseldeen Babatunde Ogunjimi, had earlier warned that Nigeria could withdraw from World Bank loan arrangements if approval and disbursement delays persisted. His framing was pointed: these are loans, not grants, and Nigeria as a responsible borrower deserves timely processing. That framing inverts the conventional narrative of a developing country dependent on multilateral generosity. It did not prevent the cancellation.
Commercial performance
NERC's February 2026 commercial performance factsheet sharpens the picture. DisCos collected ₦196.68 billion against billings of ₦242.29 billion, a collection efficiency of 81.17%. The ₦80.49 billion shortfall between energy received (valued at ₦277.09 billion) and cash collected is the sector's structural liquidity gap in a single month. Collection efficiency improved by 4.84 percentage points month on month, yet total revenue still fell 3.94% from January's ₦204.74 billion. Improving ratios, declining revenue. That paradox defines the DisCo problem.
Eko DisCo led on efficiency at 94.12% collection, followed by Abuja at 89.28% and Ikeja at a strong third. Yola, Kaduna, and Jos anchored the bottom, with Yola collecting just ₦3.70 billion. The southern corridor carries commercial viability. The northern corridor remains structurally loss-making. NERC has set revised ATC&C loss targets averaging 16.64% for 2026, reflecting expected efficiency gains from DisCo investments in 2025, but the February data shows those gains have not yet materialised in revenue terms.
Series II of the Presidential Power Sector Financial Reforms Programme, expected in Q2 2026, has not been formally announced. If it does not address DisCo franchise viability directly, the settlement of GenCo legacy debts will generate new arrears on the same cycle.
A NERC tariff increase without supply improvement does not change the investment thesis for grid-connected projects. The DisCo creditworthiness problem, which determines whether GenCo invoices get paid, requires structural franchise reform, not just a higher tariff. Off-grid and distributed generation remains the commercially investable stack.
The oil windfall creates a one-time fiscal opportunity to address infrastructure constraints that have accumulated over a decade. If the window closes without a committed AKK commissioning, a TCN investment programme, and a DisCo restructuring framework, the next tariff review will face the same structural obstacles as the current one.
The tariff review, the EV duty removal, and the crude windfall are three independent policy instruments arriving in the same quarter. Separately, each is meaningful. Together they could constitute a coordinated energy sector programme: higher tariffs with guaranteed supply commitments, EV adoption supported by a rapid charging infrastructure deployment, and oil revenues funding the gas and transmission infrastructure that makes both viable. There is no signal yet that they will be used together. The watch point for Issue 05 is whether any such signal emerges in Q3 budget discussions.
Nigeria wins on crude price and pays on petrol import cost in the same supply shock
The Strait of Hormuz partial closure drove Brent to $126 per barrel in April and May 2026, the highest sustained price since 2022. For Nigeria, the shock works in opposite directions simultaneously. On the upstream side, higher prices combined with restored production at 1.66 mbpd deliver materially higher export revenue. On the downstream side, Nigeria remains a net petrol importer, and domestic consumption reached 51.1 million litres per day in April, sustaining demand pressure even at higher pump prices.
The Dangote Refinery is producing at scale but has not yet eliminated Nigeria's dependence on imported refined product. Every month of Brent above $120 widens the gap between crude export earnings and refined product import costs, with the fiscal net depending on how much crude is exported versus how much refined product is imported in the same period. The IEA's assessment of the Hormuz disruption, which the World Bank estimated could remove up to 7 million barrels per day from global supply in Q2 2026, suggests the price premium is not short-term noise. It represents a structural supply shift that may persist through Q3.
Nigeria's dual exposure as both crude price winner and refined product import loser is the structural consequence of a decade of underinvestment in domestic refining alongside the privatisation of exploration. The Dangote Refinery changes the medium-term calculus if it reaches full operating capacity through 2026. Until it does, Nigeria's fiscal position moves with the same global supply shocks it cannot control, in two directions at once. The crude windfall provides fiscal space. Whether it is used to reduce the structural exposure or to smooth short-term budget pressures is the question that will define the government's energy policy legacy.
Eight signals that will move the picture by Issue 05
- World Bank alternative support framework. The PSRO cancellation document references a shift to "alternative interventions." Whether a replacement instrument materialises in Q3 2026, and whether it carries performance conditions the sector can meet, will determine whether the cancellation is a reset or a permanent exit from multilateral power sector financing.
- Alaoji Phase 2 and wheeling arrangements. Whether NDPHC progresses the expansion from 375 MW toward the stated 800 MW ceiling and whether the Governor Otti-directed discussions produce a formal wheeling agreement to the eight Abia LGAs outside the Aba corridor. The wheeling arrangement is the mechanism that turns a national grid addition into a local supply improvement for Abia State communities currently without reliable power.
- NERC tariff review outcome. Whether the Q3 2026 review delivers a tariff increase paired with minimum supply guarantees, or a tariff increase without supply commitments. The political durability of the former is higher. Track NERC public consultation documents.
- Kasi Cloud LOS1 Phase 2 announcement. Timeline, capacity, and whether Phase 2 explores a generation PPA with the national grid or remains fully islanded. If Phase 2 is islanded, it sets the template for every subsequent hyperscale facility in Lagos.
- AKK pipeline commissioning. July 2026 remains the stated target. Any slippage compounds northern capacity constraints through winter 2026-27. The July date is the single largest near-term operational test of the gas supply premise.
- Series II of the Power Sector Financial Reforms Programme. Expected Q2 2026 but not yet announced. If it addresses DisCo franchise viability directly, it moves the sector from GenCo liquidity to full value chain restructuring. If not, the arrears cycle restarts.
- EV charging infrastructure policy response. Whether the EV duty removal is followed by any charging infrastructure mandate, investment incentive, or NERC regulatory guidance on EV load connection standards. The duty removes a fiscal barrier. Infrastructure investment removes the binding constraint.
- Lightrock first Africa close. Timeline and country allocation for the $500 million clean energy fund. If a material share targets grid infrastructure rather than generation, it signals a shift in investor appetite toward the transmission and distribution constraints that limit generation additions.
