The Managing Director of the Rural Electrification Agency (REA), Abba Aliyu, has warned that the proposed law to ascertain a National Authority for Renewable Energy (NARE) could create regulatory uncertainty, discourage personal funding and undermine Nigeria’s rising renewable energy market.
Mr Aliyu made the argument in a right-of-reply doc made obtainable 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 present establishments.
He acknowledged the National Assembly’s accountability to evaluate 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 mentioned.
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 ascertain NARE because the principal establishment answerable for regulating and selling renewable energy improvement in Nigeria.
Under the proposal, renewable energy duties presently 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 deal with overlapping duties, enhance coordination and supply a centered regulatory framework for the sector.
However, Mr Aliyu contended that Nigeria’s electricity market was present process a big decentralisation following the Electricity Act 2023, which enabled states to ascertain and regulate intrastate electricity markets.
He argued that introducing one other federal regulator at a time when federal and state establishments have been nonetheless understanding their respective duties could create further jurisdictional disputes.
According to him, a single renewable energy mission could require engagement with NERC, state electricity regulatory commissions, NARE and different establishments, probably rising 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 mentioned.
“That is not simplification. It is fragmentation.”
Investment issues
Mr Aliyu mentioned 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 methods serving communities with restricted entry to the nationwide grid.
He mentioned traders wanted readability on licensing, tariffs, grid interconnection, dispute decision and the division of duties between federal and state regulators earlier than committing capital to long-term infrastructure tasks.
He argued that uncertainty over which establishment would regulate a mission could enhance financing prices and make some investments commercially unviable.
“Capital dislikes ambiguity,” he mentioned, warning that further regulatory necessities could in the end enhance electricity prices or forestall tasks from reaching monetary shut.
Mr Aliyu cited the World Bank-supported Distributed Access by means of Renewable Energy Scale-up (DARES) programme, a $750 million initiative designed to develop electricity entry to greater than 17.5 million Nigerians by means of distributed renewable energy.
The programme targets 1,225 mini-grids and 465 megawatts of renewable energy era, with private-sector funding central to its implementation.
He additionally cited the Nigeria Electrification Project, which he mentioned had reached greater than 7.8 million Nigerians with clear energy, whereas greater than 1.1 million households obtained new or improved electricity providers.
According to him, greater than 1,000 mini-grid tasks are underneath improvement by means 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 value a mixed ₦350 billion in potential home financing commitments for the sector.
The agreements, he mentioned, 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 better regulatory certainty slightly 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 mentioned 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 industrial 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 slightly than selling a specific 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 mentioned.
Mr Aliyu additionally distinguished between the duties of a regulator and people of an establishment answerable for creating the electricity market.
He mentioned NERC’s main accountability was to control electricity markets, whereas the REA supported mission improvement, mobilised financing and helped develop electricity provision in underserved communities.
Combining renewable energy promotion, mission 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 mentioned Nigeria could nonetheless set up a devoted establishment to strengthen renewable energy improvement if its mandate centered on areas not adequately served by present establishments.
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He urged such an establishment could promote funding, mobilise inexperienced finance, help analysis and innovation, enhance renewable energy useful resource mapping, develop native manufacturing and provide chains, construct technical expertise, and coordinate actions between federal and state governments.
He mentioned 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 mentioned.
Mr Aliyu acknowledged that the prevailing framework had shortcomings, together with coordination challenges, gaps in federal-state regulatory harmonisation, insufficient information integration and prolonged mission improvement timelines.
He argued, nonetheless, that these issues must be addressed by means of improved coordination and clearer duties slightly 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, traders, lenders, renewable energy builders and improvement finance establishments earlier than continuing.
He additionally known as for an evaluation of the implications of the proposed modifications for present licences, contracts, concessions and development-finance commitments.
The invoice, which has handed second studying within the House, is anticipated to endure additional legislative scrutiny by the related committee.
Mr Aliyu mentioned lawmakers ought to choose the proposed modification by whether or not it will enhance electricity connections, develop era capability, entice personal funding and enhance dependable energy provide, slightly than by the variety of establishments it will create.
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