Nigeria transitioning off-grid sector toward bankable utility markets

…eyes 3.7GW solar manufacturing capacity by 2027 Abba Aliyu, managing director of the Rural Electrification Agency (REA), has noted the ongoing structural transition in Nigeria’s off-grid electricity sector. He highlighted the shift from small-scale pilot projects to a bankable, utility-style market following key regulatory interventions by the Nigerian Electricity Regulatory Commission (NERC). Speaking in Abuja during a knowledge-exchange visit by the Zanzibar Utilities Regulatory Authority (ZURA), Aliyu stated that this shift has paved the way for the construction of 48 interconnected mini-grid sites across 19 states, cutting across 10 electricity distribution companies (DisCos). These projects are being rolled out as one unified programme under the Interconnected Mini-Grid regulatory framework introduced by NERC. According to Aliyu, the scheme is expected to deliver 252,505 new and improved electricity connections when completed, alongside 213.3 megawatts-peak of solar photovoltaic capacity, 166.1 megawatt-hours of storage, and 82.5 megawatts of peak load. Expanding mini-grid caps and developer ecosystems “The mini-grid regulations last year had a cap of 1 megawatt. We can’t build a mini-grid above 1 megawatt. What we showed the regulator – the economics and the technical data – they changed the regulation. Now we can build a mini-grid of up to 10 megawatts interconnected and 5 megawatts isolated,” Aliyu said. He explained that this regulatory change has opened the door for larger, more bankable projects. It has also helped reshape the market from a contractor-led space into one increasingly driven by developers and utility-scale operators. “We are no more contractors. They come, fix all, do this. But when we created that ecosystem and opportunity, they started transitioning from contractors to developers. And now that we have 1,350 mini-grids, we ask them that you have to start to move from developers to a utility-scale managed company,” he added. Aliyu noted that the REA now works with more than 150 renewable energy service companies, some of which already manage portfolios of about 30 megawatts and are expanding beyond Nigeria. Data-driven planning and economic impact Aliyu emphasised that the reforms were supported by a broad planning and data strategy designed to target communities and productive-use assets precisely. The agency has mapped more than 700,000 communities nationwide, alongside 51,022 hospitals, 11,129 markets, 170 schools, 7,979 factories, 407 functioning mini-grids, 57 dams, and 2,194 feeders across distribution company networks. This data-driven approach determines the least-cost way of electrifying each location, whether through solar home systems, isolated or interconnected mini-grids, or grid extension. Aliyu linked electricity access to wider economic growth, arguing that inadequate power supply has contributed to the decline of manufacturing in parts of the country, noting a drop from 250 to 300 factories in the southwestern and northwestern regions during the 1980s to just 40 to 70 functioning factories today. Scaling domestic manufacturing and universal access Beyond access, Aliyu stated that the REA is preparing Nigeria for a future where electricity demand will surge due to population growth, the electrification of everything, and the energy needs of artificial intelligence and data centres. Furthermore, the agency is working to expand local solar manufacturing, with the country expected to hit 3.7 gigawatts of manufacturing capacity by the end of next year. Some Nigerian photovoltaic panel manufacturers have already begun exporting to Ghana, supporting the long-term goal of reducing import dependence and building a stronger domestic value chain. The agency maintained that the mini-grid programme and broader electrification strategy are central to Nigeria’s goal of achieving universal electricity access by 2060. In his remarks, William Gboney, leader of the ZURA delegation and a World Bank consultant at ZURA, stated that the visit aimed to facilitate knowledge exchange on system dispatch, grid stability management, balancing operations, and coordination mechanisms in Nigeria. Join BusinessDay whatsapp Channel, to stay up to date Open In Whatsapp