The Manufacturers Association of Nigeria (MAN) has launched an industrial energy financing programme designed to reduce electricity costs for factories and improve the reliability of power supply across the manufacturing sector.

The initiative will provide manufacturers with access to structured, long-term financing for alternative energy infrastructure as rising electricity tariffs and unreliable grid supply continue to undermine production capacity and profitability.

MAN President, Dr Ifeanyi Okoye, announced the programme on Tuesday at the 2026 Manufacturers Energy Security and Energy Efficiency Summit in Lagos. The event was organised by Manufacturers Power Development Company Ltd. (MPDCL), in partnership with GIZ and the Nigerian Energy Support Programme (NESP).

The programme will support the adoption of rooftop solar installations, battery energy storage systems, captive natural gas solutions and smart energy management networks. Its financing model is intended to reduce manufacturers’ dependence on expensive, short-term commercial bank loans when investing in energy infrastructure.

Okoye disclosed that manufacturers currently spend approximately 40 per cent of their profits managing energy-related challenges. He identified high electricity tariffs, inconsistent grid supply and reliance on fossil fuels as major constraints affecting industrial output and competitiveness.

He explained that the initiative would connect manufacturers to long-term financing instruments, climate funds, green investments and asset-financing arrangements to facilitate the transition to more efficient energy systems.

The financial burden on manufacturers was further highlighted by John Aluya, Chairman of the Board of Directors of MPDCL, who put energy expenditure at more than 40 per cent of manufacturers’ operating costs.

According to him, the expense of independently generating electricity has continued to erode profit margins and weaken the competitiveness of locally manufactured products. The proposed intervention will therefore explore solar photovoltaic installations, battery storage, captive gas generation, energy efficiency measures and carbon credit monetisation.

Figures presented by Dr Adaora Chukwudozie, Regional Chairman of MAN’s Anambra, Ebonyi and Enugu Branch, also illustrated the growing financial pressure. She disclosed that manufacturers spent approximately N1.11tn on alternative electricity generation in 2024, with expenditure increasing to about N1.35tn in 2025.

The expenditure effectively means manufacturers are maintaining a second electricity supply system alongside the national grid. Chukwudozie noted that the funds committed to alternative power could otherwise have been invested in raw materials, machinery, staff salaries and business expansion.

She also outlined a proposed 1.5-megawatt pilot energy project in the South-East, which is expected to generate savings of more than 50 per cent.

Under the proposed arrangement, manufacturers would gain access to the energy infrastructure without making the initial capital investment. This would allow businesses to retain their working capital for production activities rather than tying up funds in energy equipment.

The proposed project will incorporate smart metering, remote monitoring and energy dashboards to measure electricity consumption, generation and actual cost savings.

Chukwudozie said the model could be replicated across MAN branches, creating opportunities to consolidate energy demand, attract investors and benefit from economies of scale. However, she emphasised that demonstrable savings and verifiable operational results would be essential to establish the project’s viability and encourage broader participation from manufacturers and financiers.

Speaking on the need for alternative financing, Okoye said: “Manufacturers cannot finance modern industrial energy transitions with short-term commercial bank loans carrying high interest rates.”

He further described the programme as a shift towards practical implementation, stating: “Today, we are moving beyond advocacy into implementation. This flagship initiative is designed to hand the power back to the manufacturer, literally and figuratively.”

Meanwhile, Minister of Power Joseph Tegbe outlined the Federal Government’s efforts to address infrastructure deficiencies, improve electricity supply and strengthen the country’s power sector.

He acknowledged that unreliable electricity increases manufacturers’ cost of capital, forces businesses to divert working capital towards diesel and other alternative energy sources, disrupts production schedules and reduces machinery utilisation.

Tegbe presented a four-pronged government roadmap covering grid standardisation, sector liquidity and sustainability, asset optimisation, and the expansion of electricity infrastructure.

He also disclosed that the ministry was undertaking a technical audit of the power sector to identify infrastructure deficiencies and ensure investment priorities are based on actual requirements.

Lagos has been designated as the first major energy corridor under the initiative, reflecting its substantial share of Nigeria’s electricity demand. According to the minister, additional corridors will be developed to serve other major industrial and commercial centres.

The ministry is also working to improve gas supply to power plants, increase renewable energy deployment and maximise the performance of existing generation and transmission infrastructure.

On electricity regulation, the Nigerian Electricity Regulatory Commission (NERC) disclosed that it was engaging distribution companies to prioritise dependable electricity supply for industrial consumers.

NERC Chairman, Dr Musiliu Oseni, represented by the commission’s Director of Economic Regulation, Agba Terab, said the regulator was also collaborating with stakeholders on industrial electricity supply corridors, network investments and battery-enabled energy storage.

Oseni further explained that NERC’s net billing framework would enable eligible renewable energy consumers to supply excess electricity to distribution networks and receive credits under transparent regulatory arrangements.

The framework is expected to strengthen the business case for industrial renewable energy investments by allowing manufacturers to derive financial value from electricity generated beyond their immediate consumption requirements.

He added that regulatory certainty and transparent compensation arrangements would be essential to attracting private sector investment into distributed power generation and green financing.

MAN’s intervention is aimed at reducing one of the most significant operating expenses facing Nigerian manufacturers by making alternative and energy-efficient power solutions more accessible.

However, the programme’s effectiveness will depend on manufacturers’ ability to secure affordable long-term financing and achieve verifiable savings that justify the investment. Improvements in public electricity infrastructure and clear regulatory frameworks will also remain critical to expanding these solutions across the manufacturing sector.

SOURCE: BizWatch Nigeria