The Nigerian energy sector is witnessing significant development, with banks showing increased willingness to finance renewable energy projects.
The Managing Director of the Rural Electrification Agency (REA), Abba Aliyu, emphasized the increasing willingness of banks in Nigeria to throw their weights behind renewable energy projects.
Speaking at the Lagos Energy Summit 2025, Aliyu urged private-sector players to refine their business proposals to improve their chances of securing funding.
Aliyu noted that financial institutions are adopting more innovative approaches to energy financing, yet many private businesses lack well-structured plans that align with banking expectations.
“I’ve never been a spokesperson for banks, but I can confidently say that they are ready to fund renewable energy. My position allows me to see the transactions firsthand, and I can confirm their commitment,” he stated.
Poor business proposals
Despite the readiness of banks, many applications submitted by private businesses fail to meet fundamental financial standards.
Aliyu explained that proposals often lack alignment between business plans and financial statements, reducing their chances of approval.
He stressed the importance of due diligence, urging entrepreneurs to develop comprehensive plans that cater to banks’ funding criteria.
Critical energy challenges in Nigeria
Speaking at the same event, Chartered Petroleum Engineer and Senior Lecturer at the University of Aberdeen, Dr. Lateef Akanji, highlighted the critical energy challenges Nigeria faces.
He cited that only 33% of Nigerians have access to electricity, with power shortages causing an estimated annual economic loss of $26.2 billion.
- Dr. Akanji noted that while Nigeria possesses vast energy resources—including fossil fuels and renewable options—the country continues to struggle with energy poverty, limited economic growth, unemployment, and climate concerns.
- He praised Lagos State for pioneering clean energy initiatives through progressive policies and stakeholder collaborations.
- He further recommended addressing the skills gap in the renewable energy sector through capacity building, training programs, and knowledge transfer.
To accelerate energy investments, he advocated for green bond initiatives and upfront capital investment in essential energy projects.
Compliance and accountability in the energy sector
Commissioner, Engineering and Standards at the Lagos State Electricity Regulatory Commission, Engr (Dr) Oluwaseun Fadare, said that to ensure compliance and accountability in the energy sector, there is a need to enforce adequate maintenance through regulation, which requires strategic policies and frameworks.
He highlighted penalties for non-compliance, incentives for maintenance excellence, public reporting mechanisms, capacity building and training, technology integration in regulations, an independent regulatory body, and emergency maintenance funds as key solutions for effective regulation.
“Combining mandatory standards, technological advancements, incentives, and penalties, these regulatory measures can effectively enforce adequate maintenance and promote long-term sustainability.”
What you should know
Last month, the Rural Electrification Agency received approval to establish a renewable asset management company to sustain its electrification interventions and ensure long-term infrastructure viability.
- Aliyu disclosed this at the signing of a collaborative agreement between the agency and eight Renewable Energy Service Companies (RESCOs) in Abuja.
- He said the new asset management company is expected to oversee and maintain mega assets, including renewable energy infrastructure worth nearly $500 million, which has been deployed to universities across Nigeria.
Aliyu also revealed that President Bola Tinubu has approved N100 billion for REA to implement the National Public Sector Solarisation Project, a strategic initiative aimed at reducing the cost of governance by transitioning public institutions to solar energy.
