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The Federal Government has announced its strategy to secure N1.1 billion in private sector funding as part of a co-financing plan to boost the power sector. Abba Aliyu, the Managing Director of the Rural Electrification Agency (REA), made this known at the ongoing Nigeria Energy Summit in Lagos, organized by Informa Markets, with the theme “Breaking Barriers to the New Energy Era: Clean, Reliable and Sustainable.”
Aliyu highlighted the significant challenges facing Nigeria’s electricity sector but stressed that the government is committed to addressing them. “In addition to the $750 million already allocated by the current administration, we expect this sum to generate N1.1 billion in private sector funding as co-financing. The government provides grants and subsidies to catalyze private investments,” he stated.
The REA boss also pointed to the agency’s efforts in facilitating N100 billion in local financing for developers. “This process has already started,” he added, noting that diversifying the country’s power generation sources is crucial. While solar energy remains economically viable and easy to deploy, the REA is now exploring options like small hydro, micro-hydro, biomass, and wind.
Aliyu revealed that micro mini-grid tenders for a 336-kilowatt micro-hydro plant are set to be released within the next few weeks. Additionally, the agency has identified sites in Katsina, Ondo, Ekiti, Cross River, Nasarawa, and Sokoto for small and micro hydro projects.
He also provided statistics on mini-grid developments across Nigeria, noting that 1.5 million Nigerians are connected to mini-grids that enhance electricity reliability, while 3 million are connected to isolated mini-grids, providing electricity access for the first time. A further 12 million Nigerians are benefiting from mesh grids, stand-alone systems, and solar home systems. These programs are expected to begin next month.
Despite these strides, Aliyu emphasized the need for improvement in the commercial viability of private sector players involved in off-grid energy projects. “Financial viability is key for the sustainability of mini-grids and any infrastructure project,” he said.
Hakeem Disu, Co-founder of Lihon Energy, praised Nigeria’s energy transition as one of the most advanced in Africa. He highlighted the role of mini-grids and solar systems in improving the livelihoods and economic activities of rural communities.
Disu noted that renewable energy projects like solar-powered irrigation and dryers for agriculture could have a profound impact on rural areas. “These initiatives are improving investor confidence in Nigeria, offering opportunities like World Bank grants and carbon credits for businesses providing electricity to rural areas,” he added.
Ade Yusuf, Exhibition Director of Energy Portfolio -MEA at Informa Markets, echoed this sentiment in his opening remarks. He emphasized Africa’s growing role in global economic growth and the energy sector’s transformation, focusing on renewable energy, energy efficiency, and digitalization.
