- NERC urges a review of the Rural Electrification Agency’s $2 billion fund to ensure its effective use in powering Nigeria’s growth.
- The Electricity Regulator calls for a policy rethink on how the REA’s $2bn fund can drive sustainable electrification and productivity.
The Nigerian Electricity Regulatory Commission (NERC) has called for a full review of how the Rural Electrification Agency’s (REA) $2 billion fund is being managed. The call follows rising pressure from energy leaders for stronger regulation, better governance, and coordinated reforms to stabilise Nigeria’s struggling power sector.
Speaking at an event to mark 20 years of electricity sector regulation, NERC’s Vice Chairman, Dr Musiliu Oseni, emphasised the urgent need for a policy rethink regarding the deployment of the REA’s $2 billion fund. According to him, a larger share should support industrial hubs and manufacturing zones. “Mini-grids can power access,” he said, “but only robust systems can power prosperity.”
Dr Oseni reminded participants that the Electric Power Sector Reform Act gave NERC its regulatory mandate two decades ago. Since then, the Commission has achieved significant milestones. It has supervised privatisation, improved supply reliability, and strengthened consumer protection. Consequently, about 30% of electricity consumers now enjoy better service than they did 20 years ago.
He said strategic and effective regulation had saved the government huge subsidy costs, translating to trillions of naira. As a result, these savings have strengthened the nation’s fiscal stability. This has reinforced the country’s fiscal balance. Moreover, the Electricity Act of 2023 has decentralised regulation, giving 15 states authority to manage their own power markets. However, Dr Oseni warned that regulation “is not populism or politics; it demands independence, objectivity, and integrity.”
Similarly, the World Bank Country Director, Mr Mathew Verghis, supported NERC’s call for reform. He stated that stronger regulation and sound governance were essential for a financially stable electricity market. Nigeria, he explained, has the world’s most significant electricity access deficit. Despite this, inefficiencies and weak investment have slowed progress since privatisation in 2013.
Nevertheless, Verghis expressed optimism about Nigeria’s prospects. He highlighted the country’s vast energy resources and youthful population as key drivers of change. Furthermore, he praised NERC for enabling 7.8 million Nigerians to gain access to electricity through renewable energy projects. Strong regulation, he said, encourages private investment and promotes wider adoption of clean energy.
Meanwhile, Minister of Power Adebayo Adelabu praised NERC for two decades of professionalism and dedication. He confirmed that reforms are underway to strengthen Distribution Companies (DisCos), expand metering, and ensure accountability. He also reported progress under the Presidential Power Initiative (Siemens Project), which has raised generation capacity to 5,300MW in 2024, up from 4,200MW in 2023.
In addition, Adelabu revealed that President Bola Tinubu had approved a ₦4 trillion bond to pay verified debts owed to Generation Companies (GenCos) and gas suppliers. This, he said, aims to resolve the sector’s liquidity crisis and build a commercially viable market.
Former African Development Bank (AfDB) President, Dr Akinwumi Adesina, represented by the Group Managing Director of Sahara Group, urged Nigerian leaders to protect and empower local investors. He argued that Nigerians must lead in solving the nation’s electricity challenges. Otherwise, he warned, favouring foreign players over domestic stakeholders would damage long-term progress.
Ultimately, the anniversary event reflected a shared commitment to a stronger, more reliable power sector. Through sound regulation, transparency, and reform, Nigeria aims to utilise the REA’s $2 billion fund effectively to expand access to power industries and secure a sustainable energy future.