|Study Period:||2018- 2026|
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The Nigerian power EPC market is expected to register a CAGR of more than 3% during the forecast period of 2021-2026. The COVID-19 pandemic has delayed several power projects in the country during Q1 and Q2 2020. However, factors such as increasing investment and supportive government policies are likely to drive the Nigerian power EPC market during the forecast period. The Nigerian power sector is dominated by thermal power generation, that too gas-fired, which accounted for over 80% of the total power generation in the country as of 2019. The transmission losses in Nigeria, across the network, are high at an average of approximately 8%-10%, compared to the emerging countries’ benchmarks of 2%-6%. The Nigerian government is approaching foreign investment for power plant infrastructure to full fill the demand of the country. This, in turn, is expected to propel the Nigerian power market during the forecast period. However, geopolitical tensions and the high fiscal deficit coupled with a high inflation rate are expected to negatively impact the Nigerian power EPC market in the short term.
- Renewable energy is expected to witness significant growth in the Nigerian power EPC market due to the country's supportive government policies and upcoming renewable energy projects.
- Emerging markets such as distributed power generation, smart grids, and energy storage are expected to create ample opportunities for the players in the near future.
- The rise in domestic electricity demand led to increased electricity generation targets, which are likely to drive the demand for new power generation and T&D projects in the country during the forecast period.
Scope of the Report
The Nigerian power EPC market report includes:
Key Market Trends
Renewable Energy to Witness Significant Growth
- As of 2019, the Nigerian power sector is dominated by thermal power generation, accounting for about 80% of the total power generation in the country. However, the thermal industry is witnessing slow growth due to inadequate infrastructure and disruptions in the regular gas supply. Therefore, the Nigerian government is now focusing on renewable energy to meet the electricity demand, as the country has an abundance of various renewable energy resources, particularly solar, wind, biomass, and small hydropower (SHP).
- As of 2019, Nigeria’s solar photovoltaic (PV) installed capacity reached 28 MW in 2019, representing an increase of 47.36%, compared to 19 MW in 2018. The Renewable Energy Master Plan was launched in 2011 to increase the share of renewable energy in the country by 10% by 2025, compared to around 3%, in 2019.
- As of 2019, there were about 1436 MW of renewable power plants under construction, including the small hydropower plants. Solar power accounts for about 94% of the upcoming renewable power plants’ capacity in the country.
- Furthermore, the country is expected to receive investment worth more than USD 100 million from the European Union (EU) for the country’s Renewable Energy Master Plan. This factor is expected to boost the development of several renewable energy projects in the coming years.
- Hence, upcoming projects, investments, and policies for renewable energy are expected to be the biggest and the most dominating driver for the Nigerian power EPC market during the forecast period.
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Rising Electricity Consumption to Drive the Market
- Nigeria is one of the largest economies in the African continent, with a GDP of USD 448 billion in 2019. However, its power sector is registering a lower growth rate than its peer countries' growth rate. About 40% of its population has no access to grid-connected electricity, and those connected to the grid face extensive power outages.
- The country’s transmission infrastructure is grossly inadequate and is a key factor responsible for stranded generation capacity, which is characteristic of the country’s electricity grid while demand is too high. The government is trying to build new projects and better transmission facilities to serve the growth of the country.
- The Nigerian government approved a loan amount of NGN 701 billion, demanded by the Nigerian Bulk Electricity Trading PLC (NBET) from the Central Bank of Nigeria (CBN) for the expansion of the old power plants in the country. Moreover, the new 450 MW Azura-Edo power plant started production to increase the country’s generation capacity.
- Furthermore, the Ministry of Power, Works, and Housing had announced that the Rural Electrification Agency (REA), which has completed the guidelines for the operation of the Rural Electrification Fund (REF), where rural power developers would get from NGN 3.5 million to NGN 106 million to improve rural electricity. Also, the private rural power developers, NGOs, and communities are likely to get a capital subsidy from NGN 3.5 million (about USD 10,000) to NGN 106 million (USD 300,000) to cover 75% of the project cost.
- Hence, as the electricity demand is rising, the country needs more power plants and new T&D infrastructure, which, in turn, is expected to increase the demand for EPC services in the power sector during the forecast period.
The Nigerian power EPC market is moderately consolidated. Some of the key players operating in this market include Gentec EPC Ltd, Andritz AG, Alten Energías Renovables, Energo Nigeria Ltd, and JuNeng Nig Ltd.
- In December 2020, the European Union increased its funding of the Climate Investor One (CI1) to boost renewable energy in Nigeria, including for the benefit of vulnerable communities. This contribution of EUR 10 additional million is channeled through the EU’s close partner FMO, the Dutch Development Bank. Together with the original commitment of EUR 30 million, this top-up has the potential to unlock EUR 100 million in renewable energy investments.
- The Federal Government of Nigeria wants to improve the electricity supply to 25 million people through the installation of five million solar home systems. The USD 367 million worth project will be 20% financed by the World Bank via a grant. The first series of installations will be carried out nationwide throughout December 2020.
- Mambilla hydropower project is a 3.05 GW hydroelectric facility being developed on the Dongo River near Baruf, Nigeria. The project is being undertaken by Nigeria’s Federal Ministry of Power, Construction, and Housing, with the help of Chinese investments. The project is expected to commence operation in 2030. Mambilla will be Nigeria’s biggest power plant, producing approximately 4.7 billion kWh of electricity a year.
Table of Contents
1.1 Scope of the Study
1.2 Market Definition
1.3 Study Assumptions
2. EXECUTIVE SUMMARY
3. RESEARCH METHODOLOGY
4. MARKET OVERVIEW
4.2 Market Size and Demand Forecast in USD billion, until 2026
4.3 Recent Trends and Developments
4.4 Government Policies and Regulations
4.5 Market Dynamics
4.6 Supply Chain Analysis
4.7 PESTLE Analysis
5. MARKET SEGMENTATION - BY SECTOR
5.1 Power Generation
5.2 Power Transmission & Distribution (T&D)
6. COMPETITIVE LANDSCAPE
*List Not Exhaustive
6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements
6.2 Strategies Adopted by Leading Players
6.3 Company Profiles
6.3.1 Energo Nigeria Ltd
6.3.2 Andritz AG
6.3.4 JuNeng Nig Ltd
6.3.5 Gentec Epc Ltd
6.3.6 Alten Energías Renovables
6.3.7 Sterling and Wilson Nigeria Limited
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
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Frequently Asked Questions
What is the study period of this market?
The Nigeria Power EPC Market market is studied from 2018 - 2026.
What is the growth rate of Nigeria Power EPC Market?
The Nigeria Power EPC Market is growing at a CAGR of >3% over the next 5 years.
Who are the key players in Nigeria Power EPC Market?
Gentec epc ltd., Andritz AG, Energo Nigeria Ltd., Alten Energías Renovables are the major companies operating in Nigeria Power EPC Market.