The Manufacturers Power Development Company Limited (MPDCL), established by the Manufacturers Association of Nigeria (MAN), is tackling Nigeria’s high electricity costs that are stifling growth in the manufacturing sector. Facing soaring tariffs, particularly in the high-cost Band A category, manufacturers find energy expenses unsustainable. MPDCL is stepping in with sustainable energy solutions to help manufacturers lower costs and improve efficiency.
As part of this effort, MPDCL has begun a pilot project with ten companies, supplying each with at least 1 MW of renewable energy, totaling around 10 MW. Acting Managing Director Oweh Mba-Sam, speaking in Lagos, noted the project is just the beginning of a larger nationwide strategy aimed at closing Nigeria’s energy gap. “If you are on Band A, you know what the cost of power is,” Mba-Sam said. “Then if you are manufacturing on Band A, you are in serious trouble. The Manufacturers Association of Nigeria cannot stand by while its members are struggling with these high costs.”
The company’s strategy emphasizes renewable energy, with solar power as a primary focus. Mba-Sam explained that MPDCL is encouraging manufacturers to adopt solar and other renewable sources as viable alternatives to the unreliable and costly national grid. To support this shift, MPDCL is advocating for a “Power as a Service” model. Under this arrangement, companies can install energy equipment at no upfront cost. Instead, they pay a reduced tariff—lower than current grid rates—through an agreement that can span up to 20 years. “You sign it, and it is installed for you, operating for 15 to 20 years based on the contract,” Mba-Sam said.
This approach not only shields manufacturers from fluctuating grid costs but also reduces their dependency on the national electricity network, which has been both expensive and inconsistent.
Financing and Long-Term Goals
To fund this ambitious shift, MPDCL has secured financing from offshore sources at single-digit interest rates. This funding will allow the company to expand the renewable energy program to more manufacturers across Nigeria. “Our goal is to keep expanding this project until we see the energy gap diminish,” Mba-Sam added, emphasizing that finance remains the biggest hurdle in achieving large-scale energy independence for manufacturers.
The first stage, supporting ten companies, showcases the potential impact of renewable energy on the sector. With steady access to affordable power, these manufacturers can focus resources on growth and development instead of struggling with prohibitive energy costs.
Industry Summit to Address Broader Energy Challenges
MPDCL’s initiative aligns with the goals of the upcoming Manufacturers Energy Security Summit, set for November 19-21 in Lagos. Organized by MAN, the summit will bring together industry leaders, policymakers, and energy experts to discuss sustainable energy solutions critical to the future of Nigeria’s industrial sector.
MAN President Francis Meshioye underscored the urgency of addressing Nigeria’s energy challenges head-on, calling the summit a key step in coordinating solutions between public and private stakeholders. “It is important that we address these challenges frontally,” Meshioye stated. By prioritizing energy security, he added, Nigeria can unlock greater industrial potential and boost the competitiveness of its local industries.
Meshioye urged government support in the form of policies that encourage renewable energy adoption and development of energy infrastructure. According to him, Nigeria’s unstable and costly energy supply has restricted growth, limiting the competitiveness of domestic industries. He highlighted that reducing energy costs and improving reliability could enable local manufacturers to scale operations and compete more effectively.
The summit will cover a range of topics including renewable energy, energy efficiency, and smart manufacturing, with experts from around the world sharing insights on best practices and emerging technologies.
Advocacy for Lower Tariffs and Policy Reform
The energy crisis for manufacturers is intensified by rising tariffs. MAN has actively pushed for tariff reductions, even filing a lawsuit against the Nigerian Electricity Regulatory Commission and distribution companies. Although the lawsuit was unsuccessful, MAN remains committed to advocating for fair tariffs, especially after recent policy changes raised Band A rates from N68/kWh to approximately N224–N225/kWh—a staggering 250% increase. MAN continues to call for government intervention to protect manufacturers from prohibitive energy costs, which are undermining Nigeria’s industrial growth and economic stability.
