The Managing Director of the Rural Electrification Agency (REA), Abba Aliyu, has warned that the proposed law to determine a National Authority for Renewable Energy (NARE) could create regulatory uncertainty, discourage non-public funding and undermine Nigeria’s rising renewable energy market.
Mr Aliyu made the argument in a right-of-reply doc made accessible to PREMIUM TIMES following the newspaper’s report on the House of Representatives’ consideration of the Electricity Act (Amendment) Bill, 2025.
In the doc titled “Do not fragment a market that is beginning to work: Why the proposed Electricity Act amendment risks setting back Nigeria’s renewable energy revolution,” Mr Aliyu questioned whether or not creating one other regulatory establishment would enhance electricity entry or complicate the operations of current establishments.
He acknowledged the National Assembly’s accountability to assessment laws and the necessity to speed up renewable energy improvement however argued that the proposed institutional association required elementary reconsideration.
“The question is whether creating another regulatory institution will produce one additional megawatt of electricity, one additional connection, one additional manufacturing plant or one additional naira of private investment,” he stated.
The House on 15 October superior the invoice, sponsored by Afam Ogene, the chairman of the House Committee on Renewable Energy, for second studying. The proposed laws seeks to determine NARE because the principal establishment answerable for regulating and selling renewable energy improvement in Nigeria.
Under the proposal, renewable energy obligations at present exercised by the Nigerian Electricity Regulatory Commission (NERC), REA and the Rural Electrification Fund (REF) could be transferred to the new authority.
The invoice additionally proposes allocating 40 per cent of the annual Rural Electrification Fund to NARE.
Mr Ogene had argued through the debate {that a} devoted authority would handle overlapping obligations, enhance coordination and supply a centered regulatory framework for the sector.
However, Mr Aliyu contended that Nigeria’s electricity market was present process a major decentralisation following the Electricity Act 2023, which enabled states to determine and regulate intrastate electricity markets.
He argued that introducing one other federal regulator at a time when federal and state establishments had been nonetheless figuring out their respective obligations could create further jurisdictional disputes.
According to him, a single renewable energy challenge could require engagement with NERC, state electricity regulatory commissions, NARE and different establishments, doubtlessly growing approval necessities and regulatory prices.
“At a time when we are carefully managing the relationship between a federal regulator and emerging state regulators, introducing another federal regulator organised around a technology creates a new axis of jurisdiction,” he stated.
“That is not simplification. It is fragmentation.”
Investment issues
Mr Aliyu stated the proposed authority could additionally have an effect on investor confidence in Nigeria’s distributed renewable energy market, which incorporates mini-grids and different off-grid electricity programs serving communities with restricted entry to the nationwide grid.
He stated buyers wanted readability on licensing, tariffs, grid interconnection, dispute decision and the division of obligations between federal and state regulators earlier than committing capital to long-term infrastructure tasks.
He argued that uncertainty over which establishment would regulate a challenge could enhance financing prices and make some investments commercially unviable.
“Capital dislikes ambiguity,” he stated, warning that further regulatory necessities could in the end enhance electricity prices or stop tasks from reaching monetary shut.
Mr Aliyu cited the World Bank-supported Distributed Access by way of Renewable Energy Scale-up (DARES) programme, a $750 million initiative designed to broaden electricity entry to greater than 17.5 million Nigerians by way of distributed renewable energy.
The programme targets 1,225 mini-grids and 465 megawatts of renewable energy technology, with private-sector funding central to its implementation.
He additionally cited the Nigeria Electrification Project, which he stated had reached greater than 7.8 million Nigerians with clear energy, whereas greater than 1.1 million households acquired new or improved electricity companies.
According to him, greater than 1,000 mini-grid tasks are underneath improvement by way of programmes carried out by the REA.
Mr Aliyu additional disclosed that the company had signed financing memoranda of understanding with FCMB, Lotus Bank, Alpha Morgan and Stanbic IBTC price a mixed ₦350 billion in potential home financing commitments for the sector.
The agreements, he stated, demonstrated rising curiosity from Nigerian monetary establishments in distributed renewable energy as an investible asset class.
He argued that the federal government ought to strengthen the prevailing framework and supply larger regulatory certainty reasonably than add extra layers of oversight.
Dispute over the position of the Rural Electrification Fund
The REA chief additionally questioned the proposal to allocate 40 per cent of the annual Rural Electrification Fund to the proposed authority.
He stated the fund was designed to deal with electricity-access challenges in communities the place low buyer density, restricted buying energy and weak preliminary demand made business investments troublesome.
Although renewable energy could effectively serve many such communities, he argued that the fund’s final goal ought to stay increasing electricity entry reasonably than selling a selected expertise.
“Every naira allocated from an electricity-access fund should be evaluated against a straightforward question: How many additional Nigerians will this connect to reliable electricity?” he stated.
Mr Aliyu additionally distinguished between the obligations of a regulator and people of an establishment answerable for growing the electricity market.
He stated NERC’s major accountability was to manage electricity markets, whereas the REA supported challenge improvement, mobilised financing and helped broaden electricity provision in underserved communities.
Combining renewable energy promotion, challenge improvement, licensing, tariff regulation, technical oversight and dispute decision inside one establishment, he argued, could blur the excellence between market improvement and regulation.
Alternative proposal
While opposing the proposed regulatory construction, Mr Aliyu stated Nigeria could nonetheless set up a devoted establishment to strengthen renewable energy improvement if its mandate centered on areas not adequately served by current establishments.
READ ALSO: Reps transfer to determine nationwide authority for renewable energy, cross invoice for second studying
He recommended such an establishment could promote funding, mobilise inexperienced finance, assist analysis and innovation, enhance renewable energy useful resource mapping, develop native manufacturing and provide chains, construct technical abilities, and coordinate actions between federal and state governments.
He stated these features could strengthen the sector with out making a parallel electricity regulator.
“Nigeria needs an institution that helps renewable-energy companies navigate the market, not another institution they must navigate,” he stated.
Mr Aliyu acknowledged that the prevailing framework had shortcomings, together with coordination challenges, gaps in federal-state regulatory harmonisation, insufficient information integration and prolonged challenge improvement timelines.
He argued, nonetheless, that these issues needs to be addressed by way of improved coordination and clearer obligations reasonably than mechanically creating one other company.
He urged the National Assembly to conduct a regulatory-impact evaluation of the proposed modification and seek the advice of state governments, buyers, lenders, renewable energy builders and improvement finance establishments earlier than continuing.
He additionally referred to as for an evaluation of the implications of the proposed adjustments for current licences, contracts, concessions and development-finance commitments.
The invoice, which has handed second studying within the House, is predicted to bear additional legislative scrutiny by the related committee.
Mr Aliyu stated lawmakers ought to decide the proposed modification by whether or not it will enhance electricity connections, broaden technology capability, entice non-public funding and enhance dependable energy provide, reasonably than by the variety of establishments it will create.
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