DataPro says Credit Rating is Veritable Platform to Unlock Nigeria’s Power Sector Funding
Nigeria’s foremost technology-driven rating agency DataPro, has identified credit ratings as key to restoring investors’ confidence and unlock long-term financing in Nigeria’s power sector.
In its latest rating brief for the month of June 2026, the firm advised strongly that constant liquidity shortages, rising debts and weak cash flows remain factors stifling the sector’s sustenance.
The rating firm said Nigeria’s power market remains trapped in a recurring cycle of financial distress despite years of reforms and privatisation efforts.
It said Distribution Companies often fail to recover sufficient revenue from consumers, triggering payment disruptions across the electricity value chain.
The development leaves Generation Companies (GenCos) underpaid, delays payments to gas suppliers and drives up debt obligations, forcing repeated government interventions through guarantees, refinancing programmes and bailout arrangements.
“The challenge is no longer simply about generating electricity. It is increasingly about financing the sector sustainably,” the firm said.
DataPro further said that trillions of naira in obligations have accumulated across the power market over the years, while fresh funding shortfalls continue to emerge annually, making investors and lenders increasingly cautious.
The firm explained that one of the sector’s major constraints is not only an electricity shortage but also a “confidence gap,” as investors struggle to assess risks in a market characterised by uncertain revenues and fragile repayment structures.
It said credit ratings can help close that gap by providing independent risk assessments and distinguishing financially stronger operators from weaker ones.
“A well-rated power sector entity stands a better chance of attracting funding because investors can assess its strengths more objectively,” the agency stated.
DataPro also highlighted a structural mismatch between the long-term nature of power infrastructure projects and the short-term financing commonly available in Nigeria’s domestic market.
It said projects such as transmission infrastructure, metering programmes, renewable energy investments and generation expansion require patient capital, but short-term funding arrangements continue to fuel refinancing pressure and liquidity stress.
According to DataPro, stronger credit profiles could expand access to longer-term financing instruments, including infrastructure bonds, green bonds and corporate debt issuances, while potentially lowering borrowing costs.
The agency argued that sustainable reform of the electricity market cannot rely indefinitely on government support measures.
“Government interventions have repeatedly helped prevent deeper crises within the power sector. However, long-term sustainability cannot depend indefinitely on refinancing programmes and emergency support,” it said.
DataPro noted that the rating process could also drive stronger governance, improved financial disclosure, better risk management and greater operational discipline within the sector.
