- REA secured ₦50bn to finance renewable energy and mini-grid projects in underserved communities.
- Another $119m from JICA is expected, but Nigeria still needs much more investment to close its electricity access gap.
The Rural Electrification Agency (REA) has secured a ₦50 billion financing agreement with Alpha Morgan Bank to support renewable energy projects in communities with limited or no access to electricity. The partnership will help renewable energy developers finance projects under REA programmes. Developers can use the facility to complete projects before receiving performance-based grants.
REA Managing Director Abba Aliyu said the financing comes as electricity demand continues to rise. Population growth and greater reliance on electricity across the economy are driving that demand. He said electricity would play a growing role in transportation, agriculture, healthcare and education. Digital services and artificial intelligence will also increase the need for reliable power.
However, Nigeria still faces a wide gap between electricity demand and access. Aliyu said population growth continues to outpace the expansion of electricity services. He estimated that Nigeria needs about $23 billion to improve electricity access and reliability. Current available financing, he said, remains below $2.5 billion.
“That is why we need to continue to crowd-fund this financing,” Aliyu said.
The agency also expects another $119 million from the Japan International Cooperation Agency (JICA). REA plans to use the funding for interconnected and isolated mini-grid projects.
Meanwhile, Aliyu said renewable energy would remain central to closing the electricity gap. Falling solar costs have improved the economics of new projects. Better battery technology has also made decentralised power systems more practical. The ₦50 billion facility will provide another source of funding for developers. This is important because REA’s programmes often require companies to complete projects before they receive catalytic grants.
Aliyu said local banks were becoming more comfortable with renewable energy investments. He added that financial institutions increasingly view the sector as infrastructure rather than a high-risk emerging market. The growth of mini-grids is also creating new businesses around electricity access. These include energy service companies, fintech firms and local equipment manufacturers.
In rural communities, developers are also linking electricity projects to productive activities. Some provide equipment such as grinders, dryers and welding machines through leasing or lending arrangements.
These services can allow businesses to increase production after gaining access to reliable electricity.
Alpha Morgan Bank said it entered the partnership because financing remains one of the major obstacles to power-sector development.
The bank’s Managing Director, Ade Buraimo, represented by Executive Director Doyin Anyaehie, said the institution wanted to address the financing gap through structures suited to renewable energy projects. He said the impact of poor electricity supply extends beyond generation figures. It affects rural businesses, schools, hospitals and households. Buraimo said the bank would therefore measure the partnership by its effect on communities. The focus, he added, would be on whether businesses expand and whether schools and healthcare facilities gain more reliable electricity.
The bank also plans to support viable renewable energy projects beyond the initial ₦50 billion commitment. It may consider financing structures that lower costs for developers where project fundamentals support such intervention.
For REA, the partnership adds to efforts to expand decentralised electricity supply. Mini-grids and other distributed energy systems can reach communities that remain difficult to serve through the national grid. However, the scale of Nigeria’s electricity financing gap remains substantial. The additional JICA funding and the ₦50 billion bank facility will provide more capital, but much larger investment will be needed to close the country’s access and reliability gaps.
The immediate focus will be turning the financing commitments into operating projects. Their success will depend on whether developers can deliver affordable and reliable electricity to the communities that need it most.