Precious Anga
Lagos — The Federal Government has unveiled plans to establish Renewable Energy Service Companies, RESCOs, that will compete with electricity distribution companies or DisCos over the next 10 to 15 years, as part of efforts to improve electricity access and reduce the country’s dependence on the conventional power distribution network.
Managing Director of the Rural Electrification Agency, REA, Abba Aliyu, disclosed the plan at the Oriental News 2026 Conference in Ikeja, Lagos, saying the initiative represents a strategic shift towards decentralised renewable energy capable of delivering reliable electricity to underserved communities.
Represented by the REA’s Executive Director of Corporate Services, Gboyega Ayoade, Aliyu explained that the agency is moving beyond the development of isolated mini-grids to encouraging utility-scale renewable energy systems that can independently power entire communities.
According to him, the proposed RESCOs will provide consumers with an alternative electricity supply through interconnected solar-powered mini-grids supported by battery storage.
“We at REA are developing something called the RESCOs, Renewable Energy Service Companies that will rival the DisCos in the next 10 to 15 years,” he said.
Aliyu explained that rather than approving single mini-grid projects, the agency now wants developers to establish networks of interconnected mini-grids capable of serving larger populations.
“Instead of encouraging a developer to build just one mini-grid in a community, we are encouraging developers to build utility-scale mini-grids. One developer can own an entire community and deploy between 20 and 50 interconnected mini-grids. Going forward, consumers can decide not to rely on conventional thermal power but receive uninterrupted clean energy from a Renewable Energy Service Company operating in their area,” he said.
He argued that Nigeria could no longer rely exclusively on DisCos to achieve universal electricity access, noting that many rural and semi-urban communities remain without power because distribution companies consider them commercially unattractive.
“We can’t leave everything in the hands of the DisCos. There are communities where they do not provide electricity because they are not commercially viable or because they lack functional feeders,” he stated.
Aliyu said renewable energy mini-grids provide a practical solution to this challenge because they are capable of delivering reliable electricity around the clock, provided operators maintain their battery systems effectively.
He disclosed that REA is already facilitating agreements between mini-grid developers and DisCos in areas where the distribution companies have limited or no electricity coverage.
“Under the Distributed Access for Renewable Energy Scale-Up programme, we are deploying mini-grids across the country. Developers engage directly with the DisCos in communities they do not serve, seeking approval to take over electricity supply in those locations,” he explained.
According to him, the agreements are already operational in several project locations, allowing renewable energy developers to expand electricity access without creating unnecessary conflicts with existing distribution licence holders.
Aliyu further revealed that where there is no distribution infrastructure, RESCOs can develop their own electricity networks, subject to regulatory approval from the Nigerian Electricity Regulatory Commission, NERC,.
“In communities where the DisCos are absent, RESCOs are constructing their own distribution infrastructure. Once approved by NERC and granted exclusivity rights, they can own and operate those networks to supply electricity,” he said.
Speaking on electricity pricing, the REA boss maintained that sustainable power supply would only be possible if consumers accepted cost-reflective tariffs, arguing that continued subsidy payments were no longer financially sustainable.
“Nigerians must decide whether electricity is purely a social service or a commercial commodity. Once we recognise that electricity has to be paid for at its true cost, achieving reliable power supply becomes much easier,” he said.
Aliyu cited improvements in electricity supply to Band A customers as evidence that cost-reflective pricing can deliver better service.
“Customers paying Band A tariffs are already receiving between 18 and 24 hours of electricity daily. As the sector becomes more financially viable, similar service levels can gradually be extended to other customer categories. The government can no longer sustain electricity subsidies indefinitely,” he added.
Addressing concerns over the safety of solar panels and lithium batteries, Aliyu warned against the use of substandard products, stressing that all equipment deployed under REA projects undergoes rigorous quality assessment before approval.
He disclosed that the Standards Organisation of Nigeria, SON, is strengthening quality control on imported solar components, while the agency is developing systems for the safe recycling and disposal of lithium batteries as renewable energy deployment accelerates nationwide.
Publisher of Oriental News Nigeria Online, Yemisi Izuora, said the conference highlighted the need to balance economic growth with environmental sustainability, noting that while the extractive and energy sectors remain central to Nigeria’s economy, their environmental impact requires greater attention.
The proposed RESCO model represents one of the most ambitious reforms in Nigeria’s electricity sector since the privatisation of the power industry. If successfully implemented, it could significantly expand electricity access, increase competition in power distribution and accelerate the country’s transition towards cleaner and more decentralised energy systems.
