Telecommunications operators are paying up to 37 per cent more to power rural base stations compared to their urban counterparts, largely due to diesel dependency and inadequate energy infrastructure, the Africa Finance Corporation has revealed.
According to the report, Nigerian telecom operators consume over 40 million litres of diesel each month to power network infrastructure, resulting in an energy bill that exceeds $350m annually.
These costs are significantly higher in rural and remote areas, where poor grid connectivity forces operators to rely almost entirely on diesel generators, which are not only expensive but also vulnerable to theft and operational disruptions.
“Rural base stations can cost up to 37 per cent more to power than their urban counterparts due to diesel dependency, security issues, and difficult terrain,” the report stated.
It further noted that the heavy reliance on fossil fuel-based power not only inflates operational costs but also increases carbon emissions, raising sustainability concerns in a country already grappling with energy poverty.
The AFC warned that these high energy costs, if unaddressed, risk undermining efforts to expand digital inclusion in Nigeria, particularly in underserved and remote regions where telecom services are either unreliable or entirely absent.
“With telecom operators bearing rising energy costs, especially in rural regions, there is an urgent need to accelerate the transition to more sustainable energy solutions,” the report said.
To address these challenges, the AFC recommended scaling the use of Telecom Energy Services Companies, specialised infrastructure providers that install, manage, and operate power systems for telecom towers.
These firms, the report explained, enable network operators to outsource power management, cut costs, and shift to more efficient hybrid energy systems.
“TESCOs can help de-risk energy supply for telecom operators and ensure consistent uptime, even in off-grid environments,” the AFC stated.
Many of the solutions being deployed include solar-hybrid systems, where solar energy is used as the primary power source with diesel generators or battery storage as backup.
The report also highlighted that some companies are exploring liquefied petroleum gas as a cleaner alternative fuel, particularly in areas where solar deployment is not viable due to adverse weather conditions or land constraints.
It commended the progress made through infrastructure-sharing agreements in Nigeria — particularly between major tower firms like IHS Towers and American Tower Corporation — which have enabled mobile operators to co-locate equipment and reduce both capital and operational expenditure.
“Infrastrusture sharing has proven to be one of the most effective strategies for reducing the cost of rural network rollout and maintenance,” the report added.
Despite these innovations, the AFC stressed that Nigeria still has a long way to go in bridging its digital infrastructure gap. It noted that the country would need to triple its national backbone fibre network to achieve universal broadband access and meet the demands of a growing digital economy.
The report estimates that Africa requires at least $7bn annually in digital infrastructure investment to meet rising connectivity demands, with Nigeria positioned as a key player due to its large population and high data consumption rates.
“Bridging Nigeria’s digital divide will require coordinated investment, smart regulation, and scalable energy solutions,” the AFC concluded, urging government and private stakeholders to prioritise reforms that attract long-term investment and lower barriers to rural expansion.
The State of Africa’s Infrastructure Report 2025 is the AFC’s flagship publication, offering insights into the challenges and opportunities facing critical infrastructure sectors across the continent, including energy, transport, manufacturing, and digital connectivity
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