The Federal Government has revealed plans to unlock N1.1 billion in private sector funding as part of a co-financing initiative aimed at addressing challenges in Nigeria’s power sector. This was announced by Abba Aliyu, Managing Director of the Rural Electrification Agency (REA), during the ongoing Nigeria Energy Summit in Lagos, which is focused on “Breaking Barriers to the New Energy Era: Clean, Reliable and Sustainable.”
Aliyu emphasized that, despite the significant hurdles the country faces in providing reliable electricity, the government remains committed to bridging the power gap.
“In as much as we know there are lots of challenges in terms of electricity, the Federal Government is committing a lot of resources and a lot of strategies to be able to address this electricity gap,” Aliyu said.
He highlighted that the $750 million already provided by the administration of President Bola Tinubu is expected to catalyze N1.1 billion in private sector funding as part of a co-financing effort. The REA’s approach focuses on providing grants and subsidies to encourage private sector participation in building the necessary infrastructure. In addition, the agency is actively working to mobilize N100 billion in local financing for developers to help further the development of critical energy projects.
Aliyu stressed the need to explore alternative energy sources, especially given the increasing viability of solar power. “Solar is now simple to install, and its economic feasibility has been demonstrated,” he noted. He added that the Minister of Power had tasked the REA with leveraging other renewable energy sources, including small hydro, micro-hydro, biomass, and wind power.
“In the next two to three weeks, you will see a notice of tender for a 336-kilowatt micro-hydro plant that we are partnering on. This is just one of the renewable energy projects in the pipeline,” Aliyu said. He further revealed that small and micro hydropower projects have been earmarked for locations in Katsina, Ondo, Ekiti, Cross River, Nassarawa, and Sokoto states, as part of efforts to diversify Nigeria’s energy sources.
Aliyu also shared progress on Nigeria’s mini-grid projects, noting that approximately 1.5 million Nigerians have access to interconnected mini-grids, while isolated mini-grids have provided electricity access to an additional 3 million people. Additionally, around 12 million Nigerians are now benefiting from stand-alone solar home systems and mesh grids. The country’s next phase of expansion for these systems is set to begin next month.
“The commercial viability of private sector players in the power sector must improve for the sustainability of these projects,” Aliyu stressed, underscoring that the financial viability of the infrastructure projects depends on the capabilities of the private sector implementing them.
“The entire sustainability of the mini-grid, as with any project finance infrastructure, is reliably computed upon the financial viability of the player that is implementing this. Whether it’s mini-grid, off-grid, or any infrastructure financing, that viability is subject to the commercial viability of the implementing app,” he stated.
The Nigeria Energy Summit also saw praise from industry stakeholders, with Hakeem Disu, co-founder of Lihon Energy, highlighting Nigeria’s leadership in Africa’s energy transition. Disu noted that the mini-grid and solar systems implemented by the REA are transforming the livelihoods of people in rural areas, boosting economic activities, and fostering investor confidence in renewable energy.
Disu explained, “The mini green and solar system that is coming from the Rural Electrification Agency is the way governments have pointed to improving livelihood and economic activities of people in rural areas. The project also improves investors’ confidence in Nigeria, with many likening it to a World Bank reward grant or a carbon credit for businesses providing electricity to rural communities.”
He added that renewable energy projects, especially solar power, could have a profound impact on Nigeria’s agricultural sector, where the majority of the population resides in rural areas. “By providing solar-powered irrigation systems and solar-powered dryers for preserving agricultural produce, the project can greatly enhance the livelihoods of rural farmers.”
Ade Yusuf, Exhibition Director, Energy Portfolio -MEA, Informa Markets, also spoke during the event, highlighting Africa’s increasing role in global economic growth due to its natural resource wealth and rising demand for investment and innovation in the energy sector. Yusuf emphasized that energy markets across Africa are transforming at an unprecedented pace, driven by a growing focus on sustainability, renewable energy, and climate change.
“Being in the market for 11 years now, the event has adapted to the global conversation on sustainability, energy transition, and climate change. Across this dynamic region, energy markets are transforming rapidly. We aim to create a conducive environment for policy development, investment attraction, and technology adoption in the renewable energy sector,” Yusuf remarked.
