Companies listed on the Nigerian Exchange spent N400.83bn on alternative energy sources in the first quarter of 2026, reflecting the growing financial burden of the country’s unreliable electricity supply as businesses increasingly relied on diesel, gas and other self-generated power to sustain operations.
An analysis by The PUNCH of the unaudited Q1 2026 financial statements of companies listed on the NGX Main Board showed that expenditure on alternative energy rose by 3.66 per cent from N386.67bn recorded in the corresponding period of 2025 to N400.83bn.
The analysis also showed that companies that separately disclosed electricity and power expenses recorded a steeper increase of 81.50 per cent, with total electricity costs rising from N3.85bn in Q1 2025 to N6.99bn in Q1 2026, reflecting the impact of higher electricity tariffs and continued dependence on alternative power sources.
The figures highlight the continued pressure energy costs are placing on businesses despite ongoing reforms in Nigeria’s electricity sector, with manufacturers and other large industrial users continuing to rely heavily on self-generated power to maintain production.
The review covered 24 companies that disclosed spending on alternative energy, including diesel, fuel, gas, and other power-related expenses, while 10 companies separately reported electricity and power costs.
Industrial goods companies accounted for the largest share of alternative energy spending, driven mainly by energy-intensive cement and manufacturing operations. Oil and gas firms, alongside financial institutions with extensive branch networks, also ranked among the biggest spenders.
Dangote Cement emerged as the largest spender on alternative energy after increasing its energy-related expenditure from N177.19bn in Q1 2025 to N184.87bn in Q1 2026, representing almost half of the total amount spent by all reporting companies.
BUA Cement followed with N67.34bn, although the company reduced its energy consumption costs from N74.75bn recorded a year earlier. Eterna posted N60.77bn, while United Bank for Africa spent N40.63bn under fuel, repairs and maintenance expenses, compared with N31.07bn in the corresponding period of 2025.
Zenith Bank recorded N22.71bn in alternative energy-related expenses despite reducing costs from N27.04bn in the previous year, while First HoldCo reported N9.92bn under communication, light and power expenses, up from N7.55bn.
Beta Glass spent N8.01bn on fuel, gas and electricity, while Transnational Corporation recorded N1.11bn after reducing its electricity and diesel costs from N1.36bn in Q1 2025.
Other notable spenders included Wema Bank, with N787.36m in diesel expenses; Aradel Holdings, with N3.99bn in diesel-related costs; and BUA Foods, with N214.71m on diesel and fuel purchases.
Although overall alternative energy expenditure increased moderately, individual companies recorded widely different outcomes. Union Dicon Salt posted the sharpest increase after fuel and diesel costs surged by almost 698 per cent from N0.40m to N3.18m, largely reflecting renewed operational activities alongside higher fuel prices.
Aradel Holdings also recorded one of the strongest increases as diesel-related expenses rose from N320.80m to N3.99bn. Zichis Agro Allied Industries nearly doubled its diesel costs, with expenditure rising by 89.6 per cent from N0.93m to N1.76m.
By contrast, several firms succeeded in lowering energy expenses despite the difficult operating environment. BUA Cement reduced energy consumption costs by 9.9 per cent to N67.34bn even as revenue increased, suggesting improved operational efficiency and a better energy mix.
Transnational Corporation lowered electricity and diesel costs by 18.4 per cent from N1.36bn to N1.11bn, while Nigerian Flour Mills cut fuel, gas and oil expenses by more than half, from N55.62m to N27.11m. Beta Glass also reduced fuel, gas and electricity expenditure by 5.2 per cent, while Dangote Sugar Refinery marginally lowered petrol and oil costs by 1.5 per cent.
The pressure from grid electricity costs was even more pronounced among firms that separately disclosed electricity expenses. UAC of Nigeria recorded the biggest increase after electricity and power costs surged by 181.7 per cent from N1.67bn to N4.72bn. The increase appears to stem from the consolidation of newly acquired subsidiaries alongside higher energy costs.
BUA Foods recorded an 81.3 per cent increase in electricity expenses, which rose from N6.68m to N12.10m, while Fidelity Bank’s electricity bill increased by 12 per cent to N457m. Champion Breweries, Wema Bank, Vitafoam Nigeria, and Livestock Feeds also reported higher electricity costs during the period, reflecting the growing impact of tariff adjustments on corporate operating expenses.
Economist reacts
In a telephone interview with The PUNCH, the Professor of Economics and Public Policy at the University of Uyo, Akpan Ekpo, said the figures reinforced concerns over Nigeria’s high cost of doing business, warning that the country’s weak electricity supply continued to undermine industrial competitiveness.
“The cost of doing business in Nigeria is very high, and it is largely due to the cost of power. It’s not good because companies pass some of the cost to consumers. The sooner we fix Nigeria’s power system, the better. No country runs on generators. Companies are spending more on power because the grid is not working well, and that increases the cost of doing business,” Ekpo said.
He warned that the trend could discourage fresh investment in Nigeria’s productive sectors. “Companies moving out of the national grid is not a good signal to investors. Existing investors are trying to survive by putting more money into power, while new ones may choose other countries where they will not have to spend so much on electricity. Foreign direct investment remains low, and this will stunt growth and development,” he added.
The company-level figures suggest that while some firms have improved energy efficiency or diversified their energy mix, the broader corporate sector continues to devote significant resources to maintaining independent power supplies, particularly in manufacturing, banking, and oil and gas operations.
Sectoral analysis
The pattern of expenditure also showed that energy costs remained concentrated in a handful of sectors, with industrial goods companies accounting for the largest share of spending on alternative energy.
An analysis by The PUNCH showed that companies in the industrial goods sector spent about N260.34bn on alternative energy in the first quarter of 2026, representing nearly two-thirds of the N400.83bn total. The sector’s expenditure was driven largely by Dangote Cement’s N184.87bn energy bill, BUA Cement’s N67.34bn, and Beta Glass’ N8.01bn, highlighting the heavy energy requirements of cement and glass manufacturing.
The oil and gas sector ranked second with about N64.76bn, almost entirely driven by Eterna’s N60.77bn expenditure and Aradel Holdings’ N3.99bn. Financial services companies followed with approximately N74.16bn in alternative energy costs. United Bank for Africa accounted for the largest share at N40.63bn, followed by Zenith Bank’s N22.71bn, First HoldCo’s N9.92bn, and Wema Bank’s N787.36m.
At the other end of the scale, agriculture, healthcare, and construction recorded the lowest spending. However, companies in these sectors still reported increases in diesel and electricity costs, illustrating that rising energy expenses cut across virtually every segment of the economy.
Among companies that reduced alternative energy spending, Nigerian Flour Mills recorded one of the sharpest declines after fuel, gas, and oil expenses fell by 51.3 per cent to N27.11m. Cutix also reported a 55.7 per cent reduction in power charges for its latest financial year, while Transnational Corporation, BUA Cement and Beta Glass posted notable declines, suggesting that operational efficiencies, improved energy management and better electricity supply in some locations helped moderate costs.
Rising electricity costs
Despite those improvements, the broader trend pointed to rising electricity costs. Companies that disclosed electricity and power expenses collectively increased spending by 81.5 per cent to N6.99bn, driven by higher tariffs and the rising cost of maintaining business operations.
UAC of Nigeria recorded the largest increase after electricity and power costs climbed by more than N3bn to N4.72bn. Wema Bank’s electricity expenses rose slightly from N561.59m to N566.87m, although diesel expenses increased faster, climbing 9.1 per cent to N787.36m.
Livestock Feeds recorded a 2.7 per cent increase in electricity costs, with production accounting for almost all of its power expenditure, while Champion Breweries, Vitafoam Nigeria and Fidelity Bank also posted increases.
These figures reinforce calls from multiple stakeholders to accelerate investment in renewable energy and decentralised electricity infrastructure to reduce businesses’ dependence on diesel-powered generators.
Renewable energy
Last week, in an address to a private sector gathering in Lagos, the Managing Director and Chief Executive Officer of the Rural Electrification Agency, Abba Aliyu, said renewable energy should no longer be viewed only as a rural electrification solution but as critical industrial infrastructure capable of improving productivity across the economy.
“When manufacturers depend on diesel, the cost is not only financial. It reduces margins, weakens competitiveness, increases emissions, and limits expansion. When agro-processors lack reliable power, crops are wasted, incomes fall, and value chains remain shallow. When digital infrastructure is power-constrained, our economy loses out on the next generation of data-driven services,” Aliyu said.
He added that renewable energy projects should increasingly be designed around productive economic activities such as agriculture, manufacturing, healthcare, education, and digital services to improve project sustainability and attract private investment.
The President of the Lagos Chamber of Commerce and Industry, Leye Kupoluyi, also called for greater investment in renewable energy, saying Nigeria possesses abundant natural gas and solar resources but continues to struggle with inadequate electricity supply.
“Energy is the foundation upon which modern economies are built. Sadly, Nigeria continues to face significant challenges in energy access and reliability that constrain productivity, increase operating costs, and limit business growth across sectors. For many enterprises, energy costs have become a major component of operating expenses. Renewable energy offers a pathway to energy security, economic diversification, and industrial development,” Kupoluyi said.
Similarly, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said in a 2025 policy brief that Nigeria’s electricity sector required comprehensive structural reforms to improve efficiency and attract investment.
According to him, while government intervention remains necessary in the short term to sustain electricity supply, long-term improvements will depend on strengthening governance, addressing liquidity challenges, improving transmission infrastructure, supporting decentralised renewable energy projects and implementing a credible roadmap towards cost-reflective tariffs with adequate social protection.
The findings suggest that until grid electricity becomes more reliable and cost-efficient, many Nigerian companies will continue to rely heavily on diesel, gas and other alternative energy sources, keeping energy among the biggest operating expenses for corporate Nigeria.
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