By Seun Ibiyemi
The Nigerian Electricity Regulatory Commission (NERC) has urged the Federal Government to prioritize powering industrial hubs in the utilization of the over $2 billion renewable energy funding pool available through the Rural Electrification Agency (REA).
Speaking at the Commission’s 20th anniversary in Abuja on Thursday, Musiliu Oseni, Vice Chairman of NERC, said that while the funds comprising grants and loans from multiple international sources are crucial for expanding energy access, a significant portion should be redirected toward end-to-end solutions that address power supply challenges in key industrial areas.
“There must be a deliberate policy by the Federal Government to power our industries for economic prosperity. You can power access through mini-grids, but you can’t power your economy to prosperity,” Oseni said. “A substantial portion of the fund should be dedicated to providing end-to-end solutions to the power supply challenges facing our industrial hubs.”
According to him, the funding pool includes the $750 million World Bank-backed Distributed Access through Renewable Energy Scale-up (DARES) program, $200 million from the African Development Bank (AfDB), $190 million from the Global Energy Alliance for People and Planet (GEAPP), and an additional $800 million currently under negotiation with the AfDB and the French Development Bank, among others.
Oseni also emphasised the need for increased private sector investment in the power transmission segment, stating that government funding alone cannot bridge existing infrastructure gaps. He disclosed that the Commission had established a Transmission Infrastructure Fund (TIF) to attract private capital and improve the efficiency of the Transmission Company of Nigeria (TCN).
“Another key priority area is the continuous push for fiscal discipline and transparency at TCN,” he noted. “The Commission will continue regulatory processes for the transition to bilateral trading and support state regulatory commissions for capacity development.”
On the implementation of the Electricity Act 2023, Oseni revealed that 15 states have received regulatory autonomy from NERC, with 11 having completed the six-month transition period. Of these, eight have operational state regulatory commissions, while Edo, Ogun, and Oyo are yet to activate theirs.
He cautioned newly established state regulators against compromising their independence, saying, “Regulation is not populism, activism, or politics. It requires objectivity, analytical rigour, and independence. Avoid being in a compromising position with your licensees to prevent regulatory capture.”
In his remarks, Minister of Power, Adebayo Adelabu, represented by Umar Mustaphar, a director in the ministry, highlighted the importance of standardisation and coordination as states develop their individual electricity markets under the new legal framework.
Adelabu noted that the Electricity Act 2023, which decentralises the electricity market, presents a “game-changing opportunity” for states to harness their unique energy resources solar, hydro, or wind for tailored power solutions.
He also revealed that some stakeholders have proposed a strategic “city-by-city” model to achieve reliable electricity supply, beginning with state capitals by 2030, describing it as a pragmatic approach that could build investor confidence and demonstrate reform success.
However, the minister cautioned against potential risks of market fragmentation, warning that “multiple unsynchronised markets with conflicting regulations could confuse investors and strand power.”
Both officials agreed that effective collaboration between federal and state regulators, along with prudent utilisation of available energy funds, will be key to driving industrialisation and ensuring sustainable growth in Nigeria’s power sector.