By Esther Onyegbula

A Nigerian energy expert, Ms. Monica Maduekwe, has developed a diagnostic tool aimed at helping governments in the electricity sector critically assess the long-term institutional implications of financial aid and donor-backed incentives before agreements are finalised.
Maduekwe, founder of PUTTRU, an Africa-focused platform providing expert financing solutions to the energy sector, developed the tool known as the Donor-Bargain Model to enable policymakers identify when aid conditions are likely to become institutionally costly and how such conditions can be structured to strengthen, rather than weaken, long-term sector performance.

The diagnostic framework was unveiled in a new study titled “Energy Transition in the Global South: Donor Bargains and the Future of the Aid Machine,” authored by Maduekwe and published in Energy Research & Social Science, a peer-reviewed Elsevier journal that examines the intersection of energy systems, markets, business and society.

According to the study, countries facing acute financial pressure are more prone to accepting aid conditions that constrain their ability to plan effectively, coordinate public institutions and build sustainable technical capacity, particularly in the power sector. Over time, this dynamic, the research notes, traps electricity sectors in repeated reform cycles that appear effective on paper but fail to deliver tangible improvements.

“Aid becomes costly because of the bargaining process. The terms under which aid is negotiated shape institutional outcomes long after projects end,” Maduekwe explained.
The research further reveals that aid-recipient countries are not treated uniformly, as negotiation processes, leverage and donor engagement strategies differ widely. One of the most critical factors influencing these disparities, the study identifies, is the level of financial stress facing recipient countries.
Maduekwe noted that countries with high debt burdens and strong dependence on external aid often have limited bargaining power, making it difficult to resist conditions that may erode institutional authority and coordination over time.

“When financial pressure is acute, governments are less able to resist conditions that may undermine institutional authority, coordination, and long-term capacity,” she said. “In such situations, donors may impose conditions that appear reasonable in the short term, but over time weaken governance systems, erode institutions, and limit a country’s ability to deliver sustained development outcomes, including reliable electricity.”
She cautioned that failure to pay close attention to how aid agreements are negotiated could lock countries into a vicious cycle in which external support weakens the very institutions required for long-term development.

“If countries do not pay attention to how aid is negotiated, financial stress can lock them into a cycle where aid undermines the institutions needed for development,” Maduekwe added.
The study comes against the backdrop of Nigeria’s persistent power sector challenges. Experts estimate that the sector requires about $10 billion in annual investment to function optimally, but public funding remains insufficient, increasing reliance on donor-funded technical assistance and support programmes.

Maduekwe stressed that while such support remains important, there is a growing need for tools like the Donor-Bargain Model to ensure that financial aid and incentives are assessed not only for immediate benefits but also for their long-term institutional impact on the electricity sector.