Nigeria’s electricity sector could face renewed supply challenges as El Niño-induced drought conditions threaten hydropower generation across West Africa.

This is according to the latest Sub-Saharan Africa Power & Renewables Report by BMI, a Fitch Solutions company.

The report warns that Nigeria’s dependence on both domestic and imported hydropower leaves the country vulnerable to climate-related disruptions, with the market expected to become a net electricity importer in 2026.

El Niño is a recurring climate phenomenon characterized by unusually warm sea surface temperatures in the central and eastern Pacific Ocean, often resulting in prolonged drought conditions in several parts of the world.

According to BMI, lower water levels caused by El Niño could significantly reduce hydropower output, exposing Nigeria to higher electricity costs and increased supply risks.

BMI noted that previous El Niño events led to a decline of nearly 25% in Nigeria’s hydropower utilisation, while the stronger weather pattern currently developing could result in even greater losses.

The report identified hydropower-dependent electricity markets as the most vulnerable to the ongoing climate event, with Nigeria among the countries facing elevated risks.

According to the report, Nigeria’s position within the West African Power Pool (WAPP) makes it particularly susceptible to disruptions caused by reduced hydropower generation across the region.

While West Africa is generally less reliant on hydropower than East Africa, Nigeria’s growing dependence on imported electricity increases its exposure to drought-related supply shocks.

“The West African Power Pool (WAPP) will also see risks, but the impact on the pool will be lesser, as there is a lesser reliance on hydropower in the region. Of the WAPP, Nigeria will be the market at greatest risk, as it is the most reliant on imports in the region,” the report stated.

BMI estimated Nigeria’s electricity import dependency at 6.6%, but noted that the country’s integration within a hydropower-reliant regional network still leaves it exposed to climate-driven volatility.

“Markets most reliant on hydropower are at greatest risk,” the report added, identifying Nigeria alongside Ethiopia and Sudan as particularly vulnerable markets.

To address potential power shortages, BMI expects several African countries to increase reliance on thermal generation and independent power producers (IPPs) in the short term.

The report noted that countries across the continent are likely to turn to gas, coal and other conventional energy sources to offset declining hydropower generation.

For Nigeria, this could reinforce the country’s existing dependence on gas-fired power plants, which already account for the majority of electricity generation.

Beyond the immediate challenges, BMI believes climate-related disruptions could accelerate investment in renewable energy infrastructure across Africa.

The report highlighted solar energy, wind power, distributed generation systems and hybrid battery storage projects as areas likely to attract increased investment as countries seek to diversify their power mix and reduce dependence on rainfall-dependent generation sources.

According to BMI’s forecasts, total electricity generation across Sub-Saharan Africa is expected to rise from 518.7 terawatt-hours (TWh) in 2026 to 570.8 TWh by 2030.

However, the report cautioned that weak transmission networks, inadequate grid infrastructure and high financing costs could limit the extent to which new generation capacity translates into reliable electricity supply.

Multilateral institutions such as the African Development Bank are expected to play a key role in financing renewable energy projects, although regulatory bottlenecks and slow disbursement processes remain significant challenges.

BMI concluded that while drought-affected countries such as Nigeria will continue to depend on thermal generation in the near term, climate risks are increasingly influencing long-term energy planning across the continent.

The report noted that the transition toward renewable energy is becoming unavoidable, but the speed of that transition will depend on governments’ ability to address structural barriers, attract investment and improve energy infrastructure.

The report’s findings echo concerns previously raised by industry stakeholders regarding Nigeria’s hydroelectric generation capacity.

Earlier this year, the Chief Executive Officer of the Association of Nigerian Electricity Distributors (ANED), Sunday Oduntan, said the country’s major hydropower plants were generating below capacity, contributing to recurring power outages in several communities.

According to Oduntan, electricity distribution companies have increasingly relied on gas-fired power plants to compensate for shortfalls in hydropower generation and maintain supply to consumers.

The latest BMI report suggests that such pressures could intensify if El Niño-related drought conditions persist, further straining Nigeria’s already fragile electricity sector.