Nigeria’s Renewable Energy Debate
The Managing Director of the Rural Electrification Agency, Abba Aliyu, has warned that a proposed law to establish a National Authority for Renewable Energy could create regulatory uncertainty, discourage private investment and fragment Nigeria’s electricity market.
Aliyu raised the concerns in a right-of-reply document following a report by PREMIUM TIMES on the House of Representatives’ consideration of the Electricity Act Amendment Bill 2025.
The proposed legislation seeks to establish NARE as the principal institution for regulating and promoting renewable energy development in Nigeria.
Mediaplusng.com reports that the bill, sponsored by Afam Ogene, chairman of the House Committee on Renewable Energy, advanced to second reading on October 15.
Under the proposal, some renewable energy responsibilities currently handled by the Nigerian Electricity Regulatory Commission, the Rural Electrification Agency and the Rural Electrification Fund would be transferred to the new authority. The bill also proposes allocating 40 per cent of the annual Rural Electrification Fund to NARE.
Supporters of the legislation argue that a dedicated authority could address overlapping responsibilities, improve coordination and provide a stronger framework for renewable energy development.
However, Aliyu questioned whether establishing another institution would improve electricity access or introduce additional administrative burdens.
He argued that the Electricity Act 2023 had already decentralised parts of the electricity market by enabling states to establish and regulate intrastate electricity markets.
According to him, introducing another federal regulator while responsibilities between federal and state institutions are still evolving could create further jurisdictional disputes.
Aliyu warned that renewable energy developers might have to navigate multiple regulatory bodies, potentially increasing approval requirements, operating costs and uncertainty for investors.
He said investors needed clear rules on licensing, tariffs, grid connections and dispute resolution before committing funds to long-term electricity projects.
The REA chief also highlighted the potential consequences for distributed renewable energy, including mini-grids designed to provide electricity to communities with limited access to the national grid.
As evidence of the sector’s investment potential, he cited the World Bank-supported Distributed Access through Renewable Energy Scale-up programme, a 750-million-dollar initiative targeting improved electricity access for more than 17.5 million Nigerians.
The programme targets 1,225 mini-grids and 465 megawatts of renewable energy generation.
Aliyu also cited the Nigeria Electrification Project, which he said had reached more than 7.8 million Nigerians with clean energy, while over 1.1 million households had received new or improved electricity services.
He further disclosed that the REA had signed financing memoranda of understanding with FCMB, Lotus Bank, Alpha Morgan and Stanbic IBTC, representing potential domestic financing commitments totalling 350 billion naira.
According to him, these developments demonstrate growing private-sector interest in distributed renewable energy, which could be affected by uncertainty over regulatory responsibilities.
The agency chief also questioned the proposed transfer of 40 per cent of the Rural Electrification Fund to NARE.
He argued that the fund should remain focused on expanding electricity access, particularly in underserved communities where commercial investment may be difficult because of low customer density and limited purchasing power.
Aliyu maintained that market regulation and electricity project development require distinct responsibilities, warning that combining them within one institution could create conflicts and weaken accountability.
The debate now centres on whether a dedicated renewable energy authority would improve coordination or introduce additional layers of regulation.
As the bill progresses through the legislative process, the central challenge for policymakers will be designing a framework that expands electricity access, attracts investment and clarifies the responsibilities of federal and state institutions.
