AfDB commits $1.2 million grant to support Nigeria's energy transition

On Wednesday, the African Development Bank (AfDB) said it has committed a $1.2 million grant to support a feasibility study on Battery Energy Storage Systems (BESS) in Nigeria.

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Abdul Kamara, director-general of AfDB’s Nigeria country department, disclosed this while speaking on Wednesday at the inaugural/inception workshop for Nigeria BESS feasibility study in Abuja.

The Transmission Company of Nigeria (TCN), AfDB and Sustainable Energy Fund for Africa organised the programme.

He noted that the grant is part of the Africa energy transition catalyst programme, which aims to promote sustainable energy solutions in Africa.

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Mr Kamara, represented by Chigoziri Egeruoh, AfDB Nigeria country office, explained that Africa holds almost 60 per cent of the world’s best solar resources, yet accounts for only 2 per cent of global energy storage capacity.

That gap, he said, presents a challenge but, more importantly, an opportunity.

“Battery storage is central to unlocking the full potential of our renewable energy resources and delivering stable, reliable power across the continent. We are already seeing inspiring progress. In South Africa, a 1,400 megawatt-hour battery storage project is supporting grid stability and solar integration.

“In Kenya, the Olkaria geothermal-battery hybrid is delivering reliable energy to millions. Now, Nigeria is poised to take a bold step in that same direction. This is why the bank has committed a $1.2 million grant under the Africa energy transition catalyst programme to support this feasibility study,” Mr Kamara said.

He said that, implemented through the TCN, the project will assess grid integration, identify viable business and regulatory models to attract investment, and build the capacity needed for ownership and sustainability.

He added that this initiative aligns closely with Nigeria’s energy transition plan, its SE4ALL action agenda, and the renewable energy master plan, reinforcing policy coherence across energy, climate, and innovation, noting that battery storage is no longer a luxury but a necessity.

“As Nigeria’s grid evolves, storage offers real solutions: frequency stabilisation, reserve capacity, and peak load management, among others. But as we all know, technology alone will not carry the day. Regulatory frameworks and investment environments must evolve in step to scale these innovations sustainably.

“The AfDB is a committed partner in this journey. Through our $1 billion economic governance and energy transition support programme, we are helping Nigeria advance critical power sector reforms. $500 million has already been disbursed, with the second phase on track,” he said.

In addition, he said under our $1 million grant Africa Energy Sector Technical Assistance Programme (AESTAP), AfDB is supporting implementation of the Electricity Act, building state-level electricity markets, and strengthening governance.

“And of course, we continue to invest directly in energy infrastructure: from the $200 million Nigeria Electrification Project (NEP) expanding mini grids and off-grid access, to the $250 million Nigeria Transmission Expansion Project (NTEP) reinforcing the national grid.

“Nigeria is also a key country under our flagship $20 billion desert to power initiative, which aims to generate 10,000 megawatts of solar across the Sahel and provide power to 250 million people. This holds immense promise for Nigeria’s clean energy future. As we launch this important feasibility study, let us ensure it produces real, actionable outcomes that reflect Nigeria’s priorities and realities,” he said.

Mr Kamara said the AfDB remains fully committed to supporting Nigeria’s energy transition through financing, technical expertise, and long-term partnership.

Also speaking, the TCN Managing Director/Chief Executive Officer, Sule Abdulaziz, said for years, the TCN operational teams have contented with the challenges of frequency fluctuations, peak loaf pressures and limitations in reactive power support.

He said these technical constraints affect every layer of the electricity value chain from generation to dispatch to the final delivery of power to homes and industries.

Mr Abdulaziz, represented by Olugbenga Ajiboye, executive director Transmission Service Provider (TSP) explained that BESS offer a powerful means to address these persistent challenges.

For example, he said they enable frequency regulation, reserve capacity and voltage support, directly strengthening grid performance and unlocking more efficient use of transmission assets.

“This is precisely why this feasibility study is both timely and so important,” he said.

In his remarks, the Minister of Power, Adebayo Adelabu, said the feasibility study is a technical exercise and a strategic step towards future-proofing the country’s power infrastructure.

He added that Nigeria’s power sector has undergone significant reforms, yet key challenges persist, particularly the issues of power intermittency, limited dispatchability of renewable energy, grid instability and underutilised energy generation.

Mr Adelabu, represented by Assistant Director Renewable and Rural Power Access, Ben Ayangeaor, said, “With the increasing penetration of solar and wind energy in our energy mix, we must now address the critical challenge of energy storage: storing electricity when generation exceeds demand and dispatching it when needed to maintain balance and reliability.”

He said BESS provide the most practical and scalable solution to this challenge.

“They will play a pivotal role in enhancing grid stability and flexibility, reducing reliance on fossil-fuel-based peaking plants, enabling deeper integration of renewables into both grid-connected and off-grid systems, improving power quality and system reliability, especially during voltage or frequency disturbances, and ultimately extending access to clean energy in underserved and remote areas. Particularly important is the grid-forming capability of advanced battery storage systems,” he said.

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Unlike traditional grid following inverters, Mr Adelabu said grid forming BESS can establish voltage and frequency references, essentially acting as virtual generators.

“This makes them critical assets in maintaining grid frequency regulation, black start capabilities, and power system resilience during disturbances or partial outages. In others words, BESS does not only store energy they actively support the grid, improving power quality and reducing the risk of blackouts.

“The feasibility study being inaugurated today will provide a detailed technical, regulatory, financial and environmental analysis of the deployment of battery energy storage systems in Nigeria.

It will identify priority locations across the country for BESS installations, propose practical business models and financing structures, recommend policy frameworks to attract private sector participation and offer clear implementation pathways aligned with our national energy transition goals,” he said.