The Managing Director of the Rural Electrification Agency (REA), Abba Aliyu, has warned that the proposed regulation to determine a Nationwide Authority for Renewable Power (NARE) may create regulatory uncertainty, discourage inner most funding and undermine Nigeria’s rising renewable calories marketplace.
Mr Aliyu made the argument in a right-of-reply record made to be had to PREMIUM TIMES following the newspaper’s report at the Space of Representatives’ attention of the Electrical energy Act (Modification) Invoice, 2025.
Within the record titled “Don’t fragment a marketplace this is starting to paintings: Why the proposed Electrical energy Act modification dangers environment again Nigeria’s renewable calories revolution,” Mr Aliyu wondered whether or not developing some other regulatory establishment would toughen electrical energy entry or complicate the operations of present establishments.
He stated the Nationwide Meeting’s accountability to check regulation and the wish to boost up renewable calories advancement however argued that the proposed institutional association required basic reconsideration.
“The query is whether or not developing some other regulatory establishment will produce one further megawatt of electrical energy, one further connection, one further production plant or one further naira of personal funding,” he stated.
The Space on 15 October complex the invoice, subsidized via Afam Ogene, the chairman of the Space Committee on Renewable Power, for 2nd studying. The proposed regulation seeks to determine NARE because the main establishment answerable for regulating and selling renewable calories advancement in Nigeria.
Underneath the proposal, renewable calories tasks recently exercised via the Nigerian Electrical energy Regulatory Fee (NERC), REA and the Rural Electrification Fund (REF) could be transferred to the brand new authority.
The invoice additionally proposes allocating 40 consistent with cent of the yearly Rural Electrification Fund to NARE.
Mr Ogene had argued all the way through the controversy {that a} devoted authority would deal with overlapping tasks, toughen coordination and supply a targeted regulatory framework for the sphere.
Alternatively, Mr Aliyu contended that Nigeria’s electrical energy marketplace was once present process a vital decentralisation following the Electrical energy Act 2023, which enabled states to determine and keep an eye on intrastate electrical energy markets.
He argued that introducing some other federal regulator at a time when federal and state establishments had been nonetheless understanding their respective tasks may create further jurisdictional disputes.
In line with him, a unmarried renewable calories venture may require engagement with NERC, state electrical energy regulatory commissions, NARE and different establishments, probably expanding approval necessities and regulatory prices.
“At a time after we are in moderation managing the connection between a federal regulator and rising state regulators, introducing some other federal regulator organised round a generation creates a brand new axis of jurisdiction,” he stated.
“That’s not simplification. It’s fragmentation.”
Funding issues
Mr Aliyu stated the proposed authority may additionally have an effect on investor self assurance in Nigeria’s dispensed renewable calories marketplace, which incorporates mini-grids and different off-grid electrical energy methods serving communities with restricted entry to the nationwide grid.
He stated traders wanted readability on licensing, price lists, grid interconnection, dispute answer and the department of tasks between federal and state regulators sooner than committing capital to long-term infrastructure initiatives.
He argued that uncertainty over which establishment would keep an eye on a venture may build up financing prices and make some investments commercially unviable.
“Capital dislikes ambiguity,” he stated, caution that further regulatory necessities may in the end build up electrical energy prices or save you initiatives from attaining monetary shut.
Mr Aliyu cited the Global Financial institution-supported Allotted Get right of entry to thru Renewable Power Scale-up (DARES) programme, a $750 million initiative designed to make bigger electrical energy entry to greater than 17.5 million Nigerians thru dispensed renewable calories.
The programme goals 1,225 mini-grids and 465 megawatts of renewable calories technology, with private-sector funding central to its implementation.
He additionally cited the Nigeria Electrification Challenge, which he stated had reached greater than 7.8 million Nigerians with blank calories, whilst greater than 1.1 million families gained new or advanced electrical energy services and products.
In line with him, greater than 1,000 mini-grid initiatives are below advancement thru programmes applied via the REA.
Mr Aliyu additional disclosed that the company had signed financing memoranda of working out with FCMB, Lotus Financial institution, Alpha Morgan and Stanbic IBTC price a blended ₦350 billion in doable home financing commitments for the sphere.
The agreements, he stated, demonstrated rising hobby from Nigerian monetary establishments in dispensed renewable calories as an investible asset magnificence.
He argued that the federal government will have to fortify the prevailing framework and supply larger regulatory simple task fairly than upload extra layers of oversight.
Dispute over the position of the Rural Electrification Fund
The REA leader additionally wondered the proposal to allocate 40 consistent with cent of the yearly Rural Electrification Fund to the proposed authority.
He stated the fund was once designed to handle electricity-access demanding situations in communities the place low buyer density, restricted buying energy and susceptible preliminary call for made industrial investments tough.
Despite the fact that renewable calories may successfully serve many such communities, he argued that the fund’s final goal will have to stay increasing electrical energy entry fairly than selling a selected generation.
“Each naira allotted from an electricity-access fund will have to be evaluated in opposition to an easy query: What number of further Nigerians will this hook up with dependable electrical energy?” he stated.
Mr Aliyu additionally outstanding between the tasks of a regulator and the ones of an establishment answerable for creating the electrical energy marketplace.
He stated NERC’s number one accountability was once to keep an eye on electrical energy markets, whilst the REA supported venture advancement, mobilised financing and helped make bigger electrical energy provision in underserved communities.
Combining renewable calories promotion, venture advancement, licensing, tariff law, technical oversight and dispute answer inside one establishment, he argued, may blur the honor between marketplace advancement and law.
Choice proposal
Whilst opposing the proposed regulatory construction, Mr Aliyu stated Nigeria may nonetheless identify a devoted establishment to fortify renewable calories advancement if its mandate excited by spaces no longer adequately served via present establishments.
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He prompt such an establishment may advertise funding, mobilise inexperienced finance, fortify analysis and innovation, toughen renewable calories useful resource mapping, expand native production and provide chains, construct technical talents, and coordinate actions between federal and state governments.
He stated those purposes may fortify the sphere with out making a parallel electrical energy regulator.
“Nigeria wishes an establishment that is helping renewable-energy corporations navigate the marketplace, no longer some other establishment they will have to navigate,” he stated.
Mr Aliyu stated that the prevailing framework had shortcomings, together with coordination demanding situations, gaps in federal-state regulatory harmonisation, insufficient information integration and long venture advancement timelines.
He argued, then again, that those issues will have to be addressed thru advanced coordination and clearer tasks fairly than robotically developing some other company.
He advised the Nationwide Meeting to habits a regulatory-impact evaluate of the proposed modification and seek the advice of state governments, traders, lenders, renewable calories builders and advancement finance establishments sooner than continuing.
He also referred to as for an evaluate of the results of the proposed adjustments for present licences, contracts, concessions and development-finance commitments.
The invoice, which has handed 2nd studying within the Space, is anticipated to go through additional legislative scrutiny via the related committee.
Mr Aliyu stated lawmakers will have to pass judgement on the proposed modification via whether or not it might build up electrical energy connections, make bigger technology capability, draw in inner most funding and toughen dependable energy provide, fairly than via the choice of establishments it might create.
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