The proposed amendment to Nigeria’s Electricity Act has raised concerns over its potential impact on renewable energy development, private investment and electricity access across the country.
Abba Aliyu, Managing Director and Chief Executive Officer of the Rural Electrification Agency (REA), has warned that the proposed Electricity Act (Amendment) Bill, 2025, could introduce regulatory uncertainties and undermine progress in the renewable energy sector if its provisions are not carefully reconsidered.
The bill seeks to establish a National Authority for Renewable Energy (NARE), which would take over renewable energy responsibilities currently handled by the Nigerian Electricity Regulatory Commission (NERC), the Rural Electrification Agency and the Rural Electrification Fund.
Reports on the proposed legislation also indicate that 40 per cent of the annual Rural Electrification Fund could be allocated to the new authority.
While acknowledging the need to accelerate renewable energy development in Nigeria, Aliyu argued that creating another regulatory institution might introduce additional complications rather than resolve existing challenges in the electricity sector.
He noted that renewable energy has increasingly become an important part of Nigeria’s electricity market, with mini-grids attracting private investment, financial institutions showing greater interest in the sector, and local manufacturing and digital technologies supporting the expansion of energy access.
According to him, the proposed arrangement risks creating overlapping responsibilities among regulatory institutions, potentially increasing uncertainty for investors and developers.
Aliyu explained that modern mini-grid systems often combine solar power generation, battery storage, smart meters, distribution infrastructure and digital payment systems. Some also operate in connection with existing electricity distribution networks.
He questioned how responsibilities would be divided between the proposed authority, NERC and state electricity regulators when such systems operate across different regulatory jurisdictions.
He warned that uncertainty over tariff determination, grid connections, technical disputes and consumer protection could increase project risks and the cost of financing renewable energy infrastructure.
According to Aliyu, additional regulatory requirements could ultimately affect the cost of electricity paid by consumers.
He maintained that Nigeria’s electricity sector needed a more coordinated regulatory framework rather than another institution that could introduce further administrative complications.
The REA chief executive also highlighted the decentralisation of the electricity sector following the enactment of the Electricity Act 2023, which enabled states to establish and regulate electricity markets within their jurisdictions.
By July 2026, NERC had transferred regulatory oversight of electricity markets to 16 states, marking a significant development in the implementation of the decentralisation policy.
Aliyu said the growing involvement of state governments had made coordination between federal and state institutions increasingly important.
He argued that introducing another federal regulatory authority at a time when existing institutions were still working to harmonise their responsibilities could complicate the implementation of electricity reforms.
He stressed that Nigeria’s primary challenge was not a shortage of regulatory institutions but the need to ensure that existing agencies worked together effectively.
Aliyu also called for a thorough assessment of the proposed amendment, urging lawmakers to consult state governments, investors, lenders, renewable energy developers and other stakeholders before proceeding.
He emphasised the need to examine the potential implications of the proposed changes for existing development financing commitments involving institutions such as the World Bank and the African Development Bank.
According to him, any reform should be evaluated based on its ability to improve electricity access, attract private investment, expand renewable energy infrastructure and provide more reliable power to households and businesses.
He maintained that the success of electricity sector reform should be measured by tangible outcomes, including the number of new electricity connections, additional power generation capacity, increased investment and improved service delivery.
Aliyu urged policymakers to strengthen existing institutions, eliminate unnecessary duplication and provide a clearer regulatory environment for renewable energy development.
He warned that creating a new institution should not automatically be regarded as a solution to existing market challenges, stressing that reforms must produce measurable improvements in electricity access and affordability.
He called for a regulatory framework that encourages collaboration among federal and state governments, investors, developers, manufacturers and communities to sustain Nigeria’s renewable energy expansion.
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