The Rural Electrification Agency (REA) has secured a total funding pool of $1.23 billion from the African Development Bank (AfDB), development partners and other financing sources to accelerate electricity access across Nigeria.
Managing Director of the agency, Dr. Abba Aliyu, disclosed this during a benchmarking visit by the Zanzibar Utilities Regulatory Authority (ZURA) to Abuja.
The visit focused on knowledge sharing in system dispatch, grid stability management, balancing operations and electricity market coordination.
Aliyu said the agency’s funding portfolio now stands at $1.23 billion, with the largest share coming from the $750 million Distributed Access through Renewable Energy Scale-Up (DARES) programme.
Other funding sources include:
- $200 million from the African Development Bank (AfDB)
- $64 million under the Nigeria Power Project Support Scheme Initiative (NPPSSI)
- $10.9 million from IMAS
- $7.3 million from KEP
- Other development partner contributions.
He explained that the agency finances its projects through multiple channels, including:
- Federal Government budgetary allocations approved by the National Assembly;
- Funding from development finance institutions and donor agencies;
- Bilateral grants;
- Federal Government intervention funds; and
- Statutory funding, including surpluses and the two per cent operational levy embedded in the Nigerian Electricity Regulatory Commission (NERC) tariff structure.
Aliyu said Nigeria’s mini-grid policy has continued to attract investment, with the NERC Mini-Grid Regulation facilitating the development of 48 interconnected mini-grid projects across 19 states.
The projects are being implemented in partnership with 10 electricity distribution companies (DisCos) serving as off-takers.
According to him, the programme has delivered 252,505 new and improved electricity connections through the deployment of 213.3 megawatts peak (MWp) of solar photovoltaic capacity.
He added that while the programme is installing 166.1 megawatts of generation capacity, it is already supplying 82.5 megawatts of peak electricity demand.
Addressing concerns over cost-reflective tariffs for mini-grid customers, Aliyu said consumers have largely embraced the pricing model because it is significantly cheaper than relying on petrol or diesel generators.
He noted that customers willingly pay about N250 per kilowatt-hour, compared to an estimated N600 per kilowatt-hour required to generate electricity using private generators.
According to him, negative perceptions about cost-reflective tariffs are largely driven by media narratives rather than customer experiences.
Aliyu also highlighted the growing role of Renewable Energy Service Companies (RESCOs), which the REA established to develop and operate mini-grids.
He said several RESCOs now manage electricity portfolios comparable to, or even larger than, those of some electricity distribution companies.
“Some RESCOs are already managing portfolios of about 30MW, while others are being strengthened to handle more than 100MW. Some DisCos currently receive less than 60MW,” he said.
He added that as the agency rolls out more integrated mini-grid projects nationwide, some RESCOs will evolve into large-scale electricity providers with capabilities spanning power generation, distribution, metering and customer connections.
