Energy experts, policymakers, and private sector players met in Abuja on Thursday to examine the challenges impacting the development of small river hydropower projects in Nigeria, while also outlining the policy and financing reforms needed to unlock the sector’s vast potential.
The experts spoke during a panel discussion at the UK PACT (Partnering for Accelerated Climate Transition) stakeholder engagement workshop organised by AP3, an Africa-focused public-private partnership and infrastructure finance advisory firm.
The workshop, themed “Catalysing Run-of-River Small Hydropower (SHP) for Nigeria’s Decentralised Energy Transition,” was organised to align stakeholders on technical, policy, regulatory, and investment pathways that can accelerate SHP deployment nationwide.
According to the organisers, the event marked the official launch of the UK PACT-funded SHP Project Preparation Programme—a flagship initiative designed to accelerate Nigeria’s transition to clean, reliable and decentralised energy solutions. AP3 is implementing the programme across Kano, Plateau and Oyo states.
During the panel session themed “Scaling Small Hydro Power in Nigeria: Barriers, Enablers & Opportunities,” moderated by George Nwangwu, a professor and partner at AP3, panellists identified weak project preparation, regulatory uncertainty, prolonged approval timelines and political risks as key obstacles discouraging private investment in small hydropower projects.
Constraints
Speaking during the session, Sutura Bello, director of post-transaction management at the Bureau of Public Enterprises (BPE), said one of the biggest constraints facing small hydropower project implementation in Nigeria is the absence of a clear and consistent pipeline of bankable projects at both federal and sub-national levels.
Sutura Bello, director of post-transaction management at the Bureau of Public Enterprises (BPE).
“In the infrastructure space, one of the biggest elephants in the room is the lack of clear project pipelines. If the government wants private sector participation, the projects must be properly prepared. You cannot attract investors without doing the paperwork,” she said.
Mrs Bello added that Nigeria’s Public-Private Partnership (PPP) framework remains unclear, noting that the country still lacks a dedicated PPP law and relies instead on regulations overseen by the Infrastructure Concession Regulatory Commission (ICRC).
“If I am an investor coming into Nigeria, I would be confused about who exactly I am dealing with. The government must create the enabling environment for private capital to come in,” she said.
In his intervention, Mahmud Suleiman, executive director of Quaint Energy, said small hydropower projects often suffer prolonged delays due to bureaucratic bottlenecks and poor project preparation.
He cited a hydropower concession process that began in 2017 but has yet to be fully implemented, describing the timeline as discouraging for investors.
Experts discuss challenges, opportunities in small river hydropower development in Nigeria
“You cannot raise capital until all technical, financial and commercial feasibility studies are properly done. This is where many projects fail,” Mr Suleiman said, adding that recent improvements under the current administration have helped advance some stalled approvals.
He stressed the need for a streamlined PPP process and closer coordination between federal and state governments, particularly following the decentralisation of electricity regulation under the Electricity Act.
Political and policy risks
On his part, Gabriel Aduda, senior adviser at AP3 and former permanent secretary at the Federal Ministry of Petroleum Resources, warned that political transitions and policy inconsistency pose serious risks to infrastructure development in Nigeria.
“Projects are often abandoned simply because a new official comes into office. Investors will not put their money where there is no clear policy direction or continuity,” Mr Aduda said.
He argued that Nigeria’s failure to sustain long-term development plans has undermined confidence in infrastructure projects, including renewable energy initiatives.
Gabriel Aduda, a senior adviser at AP3 and former permanent secretary at the Federal Ministry of Petroleum Resources.
“Without effective policies, you cannot have a clear agenda, and without an agenda, you cannot move forward,” he added.
Meanwhile, Oluwagbenga Ajiboye, executive director of the Transmission Service Provider (TSP), one of the two business units of the Transmission Company of Nigeria (TCN), said inadequate funding and high infrastructure costs limit the ability to evacuate power from remote small hydropower sites, particularly those far from existing substations.
Mr Ajiboye explained that transmission expansion is often constrained by funding shortfalls and regulatory boundaries, adding that collaboration with state governments is critical to improving grid integration for small hydropower projects.
Experts discuss challenges, opportunities in small river hydropower development in Nigeria
Way forward
Based on the issues raised, the experts recommended clustering small hydropower projects to improve economies of scale, reduce feasibility study costs and enhance bankability.
They also called for the early involvement of financiers in project design to align government expectations with lending requirements.
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The panellists further emphasised the need for patient capital, policy consistency and sustained engagement with development finance institutions to support long-term investments in renewable energy.
They argued that with clearer policies, improved project preparation and coordinated action between federal and state governments, small river hydropower could play a significant role in Nigeria’s clean energy transition and efforts to expand electricity access.
