Reported by Weng Patrick Atokor l Journalist at Weng Global
Nigerian cold-chain operators are increasingly turning to gas-fired power generation as rising energy costs and unreliable electricity supply put pressure on businesses that depend on continuous refrigeration.
The shift is particularly significant for cold-storage and frozen-food companies because refrigeration systems cannot simply be switched off when electricity becomes unavailable. Temperature-sensitive food, agricultural products and other perishables require stable cooling throughout the storage and distribution process.
The latest development came in Lagos, where a cold-storage and frozen-food distribution company commissioned a 1-megawatt gas-fired power plant supplied and installed by Clarke Energy, a multinational distributed-energy solutions provider. The facility is designed to provide electricity for refrigeration systems, compressors and other essential operations, reducing the company’s dependence on diesel generators and the national grid.
Why cold-chain operators are looking beyond diesel
For years, diesel generators have provided an important source of backup electricity for businesses operating in Nigeria’s unreliable power environment.
For cold-chain companies, however, the cost of relying on diesel can be particularly severe. Refrigeration equipment often needs to operate continuously, meaning generators may have to run for long periods whenever grid electricity is unavailable.
Higher fuel prices therefore translate directly into higher operating costs.
Recent reporting has highlighted the pressure facing Nigerian businesses as energy prices remain elevated. Reuters reported in September that diesel prices had risen above ₦2,000 per litre in parts of Nigeria, while petrol prices had also climbed sharply.
The situation has encouraged businesses with substantial and predictable electricity requirements to consider alternative forms of captive power generation.
Captive power refers to electricity generated by a company primarily for its own operations rather than relying entirely on electricity supplied through the national grid.
Gas-fired generation is emerging as one option for larger industrial and commercial users.
1MW gas plant marks cold-chain shift
The Lagos project provides a practical example of how that transition is taking place.
According to recent reports, the 1MW gas-powered plant supplies electricity to the company’s refrigeration and cooling infrastructure, including compressors and other facility loads.
The project also represents Clarke Energy’s entry into Nigeria’s cold-chain and frozen-food storage market.
Clarke Energy’s Managing Director for Sub-Saharan Africa, Yiannis Tsantilas, said reliable electricity is fundamental to the cold-chain industry because food preservation depends on uninterrupted refrigeration.
He linked reliable energy supply to food security and efforts to reduce post-harvest losses.
The significance goes beyond one company. Cold-chain infrastructure forms part of the wider food system connecting farmers and producers with processors, distributors, retailers and consumers.
When refrigeration fails, losses can occur before products reach the market.
Electricity is a critical cold-chain requirement
Unlike many businesses that can temporarily reduce operations during a power outage, cold-storage facilities have limited flexibility.
Refrigeration equipment has to maintain appropriate temperatures even when products are not being moved or processed.
An interruption can therefore create operational and financial risks, particularly when facilities hold large volumes of food or other temperature-sensitive goods.
This makes the cost and reliability of electricity central to the economics of cold-chain operations.
Recent industry reporting has identified unreliable electricity, high diesel costs, infrastructure limitations and other macroeconomic pressures among the challenges affecting Nigeria’s cold-chain sector.
The country’s cold-chain infrastructure remains important because inadequate storage and transportation systems contribute to losses of agricultural products after harvest.
Investment in dependable refrigeration can therefore have implications beyond individual businesses.
Gas offers another route to captive power
Natural gas is increasingly being considered by Nigerian businesses seeking alternatives to diesel generation.
The attraction is partly linked to operating requirements. A gas-fired generator can provide dedicated electricity to facilities with substantial and relatively continuous power demand.
For cold-chain businesses, this can mean maintaining refrigeration without depending entirely on the national grid.
The broader energy environment is also changing.
Nigeria has been seeking to increase domestic gas utilisation and expand gas infrastructure. Reuters reported in October that the country’s domestic gas supply had exceeded 2 billion cubic feet per day, with the government looking to increase availability for power plants and industrial users.
However, gas is not automatically a cheap or universally available solution.
Access to gas infrastructure, equipment costs, supply reliability and gas pricing can all affect whether captive gas generation makes economic sense for a particular company.
Earlier in 2026, the Nigerian Midstream and Downstream Petroleum Regulatory Authority also adjusted the gas price applicable to power generation companies, highlighting the importance of gas-market economics to businesses considering gas-powered electricity.
Cold-chain investment is expanding beyond gas
The move towards gas does not mean that all Nigerian cold-chain operators are adopting the same energy strategy.
Solar-powered refrigeration is also being deployed, particularly in locations where grid electricity and conventional fuel-based generation are difficult or expensive to access.
In July, the Foundation for Partnership Initiatives in the Niger Delta and ColdHubs commissioned a solar-powered cold-storage and ice-making facility at Swali Market in Yenagoa, Bayelsa State.
The facility uses a 44kWp solar photovoltaic system and 240kWh battery storage, with the project aimed at reducing post-harvest losses and improving access to cold storage for farmers, fisherfolk and traders.
There has also been investment in expanding solar-powered refrigeration infrastructure. In June, All On announced a $1 million investment in Eja-Ice Nigeria Limited to support the expansion of solar-powered refrigeration and cold-chain solutions in underserved communities.
These developments indicate that Nigeria’s cold-chain energy transition is not based on a single technology.
Instead, businesses and investors are exploring different combinations of natural gas, solar power, batteries, grid electricity and other energy systems depending on location, scale and operating requirements.
Why the development matters for food security
The reliability of cold storage has implications for Nigeria’s food system.
A stronger cold chain can help preserve agricultural products after harvest, support longer-distance distribution and improve the ability of businesses to store products before they reach consumers.
For farmers and traders, better refrigeration can reduce the pressure to sell perishable products immediately after harvest or production.
For consumers, reducing losses throughout the supply chain can help improve the availability of food.
The connection between energy and food security is therefore increasingly important as Nigeria seeks to strengthen domestic food production and reduce avoidable losses.
The development also illustrates a wider challenge facing Nigerian businesses: the cost of maintaining reliable electricity has become an important factor in investment and operational decisions.
A broader move toward self-generated electricity
Cold-chain operators are part of a wider Nigerian business community turning to captive power.
Manufacturers, food processors and other energy-intensive businesses have increasingly invested in their own electricity-generation systems because of concerns about grid reliability and energy costs.
The expansion of gas-powered generation is occurring alongside the government’s broader push to increase the use of natural gas in Nigeria’s economy.
In September, President Bola Tinubu said the government intended to accelerate the development of CNG infrastructure and expand the use of cheaper gas-based energy alternatives.
Although transport and industrial electricity generation are different markets, both developments reflect a broader effort to increase domestic utilisation of Nigeria’s substantial natural-gas resources.
The cost question remains
The growing use of gas does not remove the fundamental challenge facing cold-chain operators.
Companies still have to invest in generation equipment, gas supply infrastructure, maintenance and technical support.
For smaller operators, the upfront cost could be a significant barrier.
This means that large-scale cold-storage facilities may be better positioned to adopt captive gas generation than small businesses operating individual cold rooms.
Energy providers, financial institutions and policymakers may therefore have an important role to play if alternative power solutions are to reach smaller cold-chain businesses.
What happens next
The commissioning of the Lagos 1MW facility could encourage further investment in gas-powered generation within Nigeria’s cold-chain sector if the model proves commercially viable.
The immediate question for operators will be whether gas can consistently provide the reliability and cost advantages required to justify the investment.
At the same time, solar-powered refrigeration and other distributed-energy solutions are likely to remain relevant, particularly in rural and off-grid communities.
For Nigeria’s cold-chain industry, the long-term objective is not simply to replace diesel.
It is to establish reliable, affordable and sustainable energy systems capable of keeping refrigeration running throughout the food-storage and distribution chain.
As investment in food storage, processing and refrigerated logistics expands, energy reliability will remain a central factor in determining how quickly Nigeria can strengthen its cold chain and reduce avoidable losses.
The shift towards gas-powered generation is therefore more than an energy decision for individual companies. It is part of a wider effort to address the infrastructure challenges that affect food preservation, business competitiveness and Nigeria’s broader food-security ambitions.
Weng Global – Stories beyond borders
Sources
- BusinessDay — “Gas power emerges as lifeline for Nigeria’s growing cold chain” — September 28, 2026.
- The Guardian Nigeria — “1MW gas plant powers Lagos cold-storage facility” — October 7, 2026.
- Vanguard — “Nigeria’s cold chain turns to gas power to cut energy costs” — September 28, 2026.
- Reuters — reporting on Nigeria’s domestic gas supply and energy prices.
- Punch — reporting on Nigeria’s cold-chain investment and gas-powered industrial generation.
