The Managing Director of the Rural Electrification Agency (REA), Dr. Abba Aliyu, says that Mini-Grids are no longer just household rural electrification projects, they now represent a highly viable commercial model for electricity delivery capable of de-risking Nigeria’s power sector and attracting massive private capital.
Speaking at the inaugural Samuel Ibiyemi Memorial Lecture in Lagos, Dr. Aliyu challenged the traditional perception of decentralized energy.
He argued that the true transformation of Nigeria’s power sector lies in shifting public resources away from subsidizing systemic inefficiencies and toward catalysing private investment.
“Too often, mini-grids are viewed only as rural electrification projects,” the REA MD stated.
“In reality, they represent a new commercial model for electricity delivery. They are built around verified demand, utilise digital revenue collection, minimise losses and provide investors with greater certainty over cash flows. In other words, they reduce investment risk,” he explained.
He emphasized that while Nigeria’s electricity challenges are frequently diagnosed as an infrastructure deficit, they are equally a financial challenge.
With distribution companies bogged down by technical losses and Nigerian businesses spending an estimated $14 billion annually on self-generation, Aliyu noted that REA is pivoting toward building an electricity market that global and local investors can trust.
“The future of public financing should not be to subsidise inefficiency but to de-risk investment. Public resources should catalyse private capital, not replace it,” he said.
To demonstrate the commercial scalability of this model, the MD shared the REA’s impressive track record to date. Under his leadership, the agency has successfully deployed nearly 200 isolated mini-grids and delivered over 164,000 mini-grid connections across the country.
In addition to this, approximately 1.4 million households and businesses have been connected via stand-alone solar systems, an achievement that has crystalized more than $1.2 billion in private-sector financing commitments.
He also revealed that the REA is now expanding into urban and peri-urban networks by partnering with mainstream electricity Distribution Companies (DisCos) to develop 48 interconnected mini-grids.
This ambitious initiative will inject approximately 288 MW of clean generation and battery storage directly into existing distribution networks.
“This demonstrates that decentralised energy is not competing with the grid, it is strengthening it,” Aliyu explained.
“The question before our generation is how government support can create a market that ultimately requires less government support. That is the transition from subsidy to solvency,” he said.
GIK/APA