Nigeria’s Rural Electrification Agency (REA) has adopted a private sector-led investment model for renewable energy development, deploying a $750 million financing programme expected to unlock about $1.1 billion in private capital as the country accelerates its transition to cleaner and more reliable electricity.
The agency also projects that Nigeria’s rapidly expanding solar energy pipeline could account for as much as 50% of the country’s electricity generation capacity within the next two to three years, underscoring the growing role of renewable energy in Africa’s largest economy.
Speaking during a panel session at the 25th Nigeria Oil and Gas (NOG) Energy Week 2026 in Abuja, REA Managing Director and Chief Executive Officer, Abba Aliyu, said the agency has fundamentally shifted from the traditional government-led infrastructure delivery model to one driven by private investment, performance-based incentives and blended finance.
“Our entire structure is now built around the private sector,” Aliyu said, noting that the REA has repositioned itself as an enabler that de-risks investments while private developers finance, build and operate renewable energy projects.
At the centre of the strategy is the Distributed Access through Renewable Energy Scale-up (DARES) programme, a $750 million initiative supported by the World Bank. The programme is designed to catalyse approximately $1.1 billion in additional private investment through public-private partnerships and results-based financing mechanisms.
Under the framework, private developers are required to invest capital and achieve agreed performance milestones before becoming eligible for grant support, creating stronger accountability while reducing investment risks.
Aliyu described DARES as one of the largest renewable energy access programmes in Sub-Saharan Africa, with a focus on expanding electricity access through mini-grids and standalone solar home systems, particularly in underserved and off-grid communities.
To strengthen project implementation, the REA has established financing partnerships with development finance institutions and commercial banks to improve liquidity and provide bridge financing for developers.
According to Aliyu, these partnerships include collaboration with the International Finance Corporation (IFC), which is expected to provide financing support estimated at between $200 million and $250 million. Additional financing facilities have been arranged with First City Monument Bank (FCMB), which has committed about ₦100 billion, while Lotus Bank and Standard Bank are also supporting the programme through financing structures of similar scale.
He said the financing architecture is designed to reduce project risks, attract long-term private capital and accelerate renewable energy deployment across Nigeria.
Aliyu also highlighted recent regulatory reforms aimed at improving the commercial viability of renewable energy investments.
He said the Nigerian Electricity Regulatory Commission (NERC) has revised the country’s mini-grid regulations, significantly increasing the allowable capacity for renewable energy projects.
Under the new framework, isolated mini-grids can now generate up to five megawatts, while interconnected mini-grids can develop projects of up to 10 megawatts, replacing the previous one-megawatt limit.
“This is a major step in making the sector more attractive and commercially viable for investors,” he said.
Aliyu noted that renewable energy, particularly solar power, is becoming an increasingly important component of Nigeria’s electricity strategy.
While clarifying that solar does not yet account for 20% of Nigeria’s installed grid-connected generation capacity, he said the country’s pipeline of solar and distributed renewable energy projects has expanded rapidly and is approaching that level.
He projected that, if current investment momentum continues, renewable energy could account for as much as half of Nigeria’s electricity generation capacity within the next two to three years.
The REA chief pointed to international examples, including Tunisia’s large-scale solar developments and Morocco’s Noor Solar Complex, as evidence that renewable energy is increasingly becoming a central pillar of national electricity systems around the world.
He argued that Nigeria must position itself to benefit from rapid technological advances transforming the global power sector.
“The global energy transition is accelerating, and technology is fundamentally changing how electricity is generated and delivered. Nigeria must position itself to take full advantage of this transformation,” Aliyu said.
The REA’s investment strategy reflects Nigeria’s broader efforts to expand electricity access through private capital, improve energy security, reduce dependence on fossil fuel-powered generation and accelerate the deployment of clean energy solutions in line with national energy transition objectives.
