Nigeria requires about $23bn in additional investment to close its electricity access gap and improve the reliability of power supply, the Rural Electrification Agency (REA) has said.
REA Managing Director, Abba Aliyu, disclosed this on Friday in Abuja while witnessing the signing of a financing agreement between the agency and Alpha Morgan Bank.
Under the agreement, the bank will provide up to N50bn to renewable energy developers participating in REA programs, including the Distributed Access through Renewable Energy Scale-up (DARES) project.
Eligible developers can access revolving loans of up to N10bn each, subject to the bank’s assessment and approval. The facility will cover up to 70 percent of counterpart funding for qualifying projects, with loan tenures of between 12 and 24 months.
Aliyu, however, said the N50bn facility was only a fraction of the funding needed to address Nigeria’s electricity challenges.
“What is required to address the electricity challenge in Nigeria and to enhance reliability of supply is about $23bn,” he said, adding that available funding was still below $2.5bn.
He said electricity demand would continue to rise due to population growth, increased electrification of transportation, agriculture, and healthcare, as well as digitalization, artificial intelligence, and data centers.
Aliyu also highlighted the falling cost of solar power and improvements in battery storage as key factors driving renewable energy investment, saying solar would remain a major source of future electricity generation.
He said the Federal Government’s $750m DARES program was targeting the deployment of 1,350 mini-grids and expanded electricity access for millions of Nigerians. The program is designed to attract additional private-sector investment alongside public funding.
The REA boss also disclosed that the agency was expecting additional financing from the Japan International Cooperation Agency to support interconnected and isolated mini-grid projects.
He said the agency was close to completing 288MW of interconnected mini-grid projects, with commissioning expected to begin in November.
Meanwhile, Alpha Morgan Bank Executive Director Doyin Anyaehie said the N50bn commitment was aimed at tackling one of the major barriers to renewable energy development: inadequate financing.
She said the partnership would help developers move viable projects from planning to implementation while improving electricity access for rural businesses, schools, healthcare facilities, and other underserved communities.
Aliyu said the REA was also preparing to launch the Renewable Energy Asset Management Company, which would help manage existing renewable energy assets, recycle capital, and attract additional private investment.
He added that the agency had developed a pipeline of about 3.7GW of local renewable energy manufacturing capacity, supported by investments estimated at $225m.
The latest financing agreement comes as Nigeria seeks to expand electricity access and attract more private capital into renewable energy projects. Earlier estimates by the REA and other reports have similarly placed the investment required to achieve broader electricity access at about $23bn.
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