Distributed renewable energy is Nigeria’s fastest path to economic growth — REA MD

…urges private sector to take advantage of enabling policies

The Managing Director and Chief Executive Officer of the Rural Electrification Agency (REA), Dr. Abba Aliyu, has declared that distributed renewable energy represents Nigeria’s fastest path to sustained economic growth.

Delivering a keynote address titled “Scaling Mini-Grids and Solar Infrastructure for Industrial Production” at the Lagos Chamber of Commerce and Industry (LCCI) Renewable Energy Outlook Conference, Dr. Aliyu emphasized that Nigeria’s industrial competitiveness will hinge entirely on its ability to build reliable, affordable, and scalable electricity systems.

“Scaling mini-grids and solar infrastructure for industrial production is not about choosing between the grid and off-grid systems.”

“It is about designing a smarter power system that uses every viable tool available. Nigeria needs the national grid. Nigeria needs gas. Nigeria needs hydropower. Nigeria needs solar. Nigeria needs storage. Nigeria needs embedded generation. Nigeria needs mini-grids. Nigeria needs private capital. Nigeria needs local manufacturing. Nigeria needs data. And Nigeria needs coordination,” Dr. Aliyu stated.

The REA MD further noted that the renewable energy market of the future will look radically different from the power architecture of the past.

He emphasized that regulation must remain forward-looking enabling commercial innovation while protecting consumers and preserving market discipline for the future.

He pointed to recent regulatory milestones by the Nigerian Electricity Regulatory Commission (NERC) as critical instruments moving the market from small pilot projects to industrial-scale deployment.

These include net billing frameworks and updated regulations that expand the capacity threshold for interconnected mini-grids from 1 megawatt (MW) up to 5MW. This expanded capacity creates room for factories, residential estates, market clusters, universities, and data centers to integrate seamlessly into a flexible power network.

Reiterating the REA’s commitment to facilitating a transparent investment pipeline, Dr. Aliyu called on the private sector to move from passive consumers to active solution structures.

“A mini-grid that powers homes changes lives. But a mini-grid that powers homes, a rice mill, a cold room, a welding cluster, a clinic, a digital services hub, and a market changes an economy,” Dr. Aliyu explained.

Aliyu also urged commercial banks and financiers to innovate beyond basic equipment asset financing.

Instead, he urged the financial sector to begin offering project preparation funds to bring early-stage concepts to bankability, local currency facilities to mitigate foreign exchange risks, and carbon revenue monetization pathways alongside green premium instruments.

Dr. Aliyu highlighted that while the government can set policy, the speed and scale of deployment will ultimately depend on the active involvement of entrepreneurs, financiers, and industrial consumers.

The REA is currently embarking on the largest interconnected mini-grid rollout in the country’s history, with over 1,000 mini-grids actively under development. This massive deployment is funded via the $750 million Distributed Access through Renewable Energy Scale-up (DARES) program, which is administered by the REA and backed by the World Bank.

Alongside this rollout, the agency has finalized the strategic framework for the National Electrification Plan, serving as the operational anchor for universal electricity delivery. The REA recently submitted a comprehensive report to the Minister of Power after mapping households across Nigeria using geospatial data to determine the absolute least-cost model required to supply electricity nationwide.

Stressing that Nigeria cannot build a sustainable energy future on permanent import dependence, Dr. Aliyu revealed a major push toward industrial localization.

Under the Nigeria First policy framework, the REA is leveraging its massive deployment pipelines to serve as anchor demand for local assembly, technical skills, and manufacturing.

The agency announced that a 3.7GW domestic renewable energy manufacturing capacity is already in the pipeline, with strategic production hubs being established across Lagos, Ogun, Bayelsa, and Kano states.

Dr. Aliyu concluded by urging the private sector to step forward and capitalize on this ripe investment environment to secure Nigeria’s industrial future.

In a separate keynote, the Minister of Power, Mr. Joseph Tegbe declared that the transformation of Nigeria’s electricity sector is a generational task that cannot be fully concluded within a single administration.

The Minister emphasized that what took over 50 years to destroy cannot be magically repaired in three months.

“The problems plaguing the power sector are largely governance and commercial challenges; the technical aspect accounts for only 20 percent of the issue.”

“The foundation of our transformation is legislative. The Electricity Act has fundamentally altered the governance of Nigeria’s electricity sector. States now possess the constitutional ability to transmit, generate, and regulate power. This administration has democratized energy governance,” he said.

He however maintained that the foundation being laid by the current administration is built to last.

Tegbe noted that while the government’s reforms are driven by a profound sense of urgency, structural overhauls of this magnitude require sustained momentum and legislative continuity rather than short-term fixes.

Also speaking, the President of LCCI, Engr. Leye Kupoluyi, affirmed that energy costs have become a critical component of operational expenses for Nigerian businesses, severely limiting growth across all sectors.

Kupoluyi also commended the Minister and the Rural Electrification Agency (REA) for their innovative, off-grid renewable solutions that are delivering accessible electricity to underserved populations, while stressing that achieving a successful transition requires massive, industrial-scale private sector investments to ensure darkness becomes a thing of the past.