REA chief warns Nigeria's proposed energy bill risks market fragmentation

Abba Aliyu, the Managing Director of Nigeria’s Rural Electrification Agency (REA), has warned that the proposed Electricity Act (Amendment) Bill, 2025, could destabilize the nation’s electricity market. The bill seeks to establish the National Authority for Renewable Energy (NARE) as the primary body for regulating and promoting renewable energy development.

Aliyu argues that the legislation would create regulatory fragmentation by transferring existing renewable energy functions from the Nigerian Electricity Regulatory Commission (NERC), the REA, and the Rural Electrification Fund (REF) to the new authority. He specifically noted that the bill proposes allocating 40 percent of the annual Rural Electrification Fund to NARE.

The REA chief cautioned that adding another regulatory layer could introduce confusion, increase the cost of capital, and discourage private investors who require predictable rules. He highlighted that the current market is already seeing progress, including over 1,000 mini-grids under development and the $750 million DARES programme. To support ongoing efforts, the REA has secured N350 billion in potential domestic financing commitments from institutions including FCMB, Lotus Bank, Alpha Morgan, and Stanbic IBTC.