Precious Anga
Lagos — The Managing Director and Chief Executive Officer of the Rural Electrification Agency (REA), Dr Abba Aliyu, has described distributed renewable energy as Nigeria’s quickest pathway to sustainable economic growth, saying the country’s industrial future will depend on its ability to deliver reliable, affordable and scalable electricity through a diversified energy mix.
Aliyu stated this while 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 in Lagos.
According to him, Nigeria’s power sector must move beyond the traditional debate between grid and off-grid electricity by embracing an integrated energy system capable of supporting industrial expansion and economic competitiveness.
“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,” Aliyu said.
He stressed that Nigeria’s future electricity market would differ significantly from the conventional power architecture, noting that regulation must remain forward-looking to encourage innovation while protecting consumers and maintaining market discipline.
Aliyu praised recent reforms introduced by the Nigerian Electricity Regulatory Commission (NERC), particularly the net billing framework and revised regulations increasing the capacity threshold for interconnected mini-grids from one megawatt to five megawatts.
He said the reforms would enable factories, industrial clusters, universities, residential estates, commercial centres and data centres to integrate more efficiently into Nigeria’s evolving electricity network.
Calling on private investors to take advantage of emerging opportunities, the REA boss urged businesses to move beyond being electricity consumers to becoming active participants in energy development.
“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,” he stated.
Aliyu also challenged financial institutions to develop innovative financing models capable of accelerating renewable energy deployment across the country.
“Commercial banks and financiers must move beyond equipment financing. Nigeria needs project preparation funding that will take ideas to bankability, local currency financing that reduces foreign exchange exposure, and innovative instruments that monetise carbon revenues while supporting green investments,” he said.
He explained that although government policies provide the enabling environment, the pace of renewable energy deployment would ultimately depend on the willingness of entrepreneurs, financiers and industrial consumers to invest.
Aliyu disclosed that the REA is implementing the largest interconnected mini-grid programme in Nigeria’s history, with more than 1,000 mini-grids currently under development through the $750 million Distributed Access through Renewable Energy Scale-up (DARES) programme supported by the World Bank.
He added that the agency has also completed the strategic framework for the National Electrification Plan, following a nationwide geospatial mapping exercise to identify the least-cost electricity solutions required to achieve universal access.
On local manufacturing, Aliyu said Nigeria must reduce its dependence on imported renewable energy equipment by developing domestic production capacity.
“Nigeria cannot build a sustainable energy future on permanent import dependence. Under the Nigeria First policy framework, we are leveraging our deployment pipeline to stimulate local assembly, technical capacity development and manufacturing. Already, about 3.7 gigawatts of domestic renewable energy manufacturing capacity is in the pipeline across Lagos, Ogun, Bayelsa and Kano States,” he said.
Also speaking at the conference, the Minister of Power, Chief Joseph Tegbe, said the transformation of Nigeria’s electricity industry requires long-term commitment, warning against expectations of immediate results from decades of structural deficiencies.
“The transformation of Nigeria’s electricity sector is a generational task. What took over 50 years to destroy cannot be repaired within a few months. The problems confronting the sector are largely governance and commercial issues, while technical challenges account for only a small fraction,” Tegbe said.
He noted that the Electricity Act has fundamentally restructured Nigeria’s power sector by granting states constitutional authority to generate, transmit and regulate electricity within their jurisdictions.
“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 generate, transmit and regulate electricity. This administration has democratised energy governance,” the minister stated.
He added that although the reforms are being pursued with urgency, achieving a stable and competitive electricity market would require sustained policy implementation beyond the tenure of the current administration.
President of the Lagos Chamber of Commerce and Industry (LCCI), Engr Leye Kupoluyi, described rising energy costs as one of the greatest challenges confronting Nigerian businesses, saying affordable electricity remains critical to improving industrial productivity and competitiveness.
“Energy costs have become one of the largest components of business operating expenses in Nigeria. The innovative off-grid renewable energy initiatives being implemented by the Rural Electrification Agency are expanding electricity access to underserved communities. However, achieving a lasting energy transition will require significant private sector investment to ensure reliable electricity becomes available across the country,” Kupoluyi said.
Stakeholders at the conference agreed that expanding renewable energy infrastructure, supported by effective regulation and increased private investment, would be essential to improving electricity access, strengthening industrial production and accelerating Nigeria’s economic development.
