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Nigerian businesses are spending an estimated $14 billion annually generating their own electricity, Managing Director, Rural Electrification Agency(REA), Mr.Abba Aliyu has said.
Aliyu, disclosed this while delivering the inaugural Samuel Ibiyemi Memorial Lecture in Lagos at the weekend.
He argued that commercially viable mini-grids can significantly reduce the country’s dependence on expensive self-generation.
Speaking on the theme, “From Subsidy to Solvency: Can Mini-Grids De-risk Nigeria’s Power Sector?”, Aliyu said Nigeria’s electricity crisis is not only an infrastructure problem but also a financial challenge that continues to impose huge costs on businesses and the wider economy.
According to him, the massive amount businesses spend annually on powering their operations demonstrates the need to create an electricity market capable of attracting both local and international private investment.
“With distribution companies weighed down by technical losses and Nigerian businesses spending an estimated $14 billion annually on self-generation, 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.
Aliyu said mini-grids should no longer be viewed merely as rural electrification projects but as a commercially viable model for electricity delivery that offers investors predictable returns while expanding access to reliable power.
“Too often, mini-grids are viewed only as rural electrification projects. 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 said.
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To demonstrate the commercial potential of decentralised energy, the REA boss said the agency has deployed nearly 200 isolated mini-grids across the country and delivered more than 164,000 mini-grid connections.
He added that about 1.4 million households and businesses have also been connected through stand-alone solar systems, helping to attract over $1.2 billion in private sector financing commitments.
Aliyu further disclosed that the agency is expanding into urban and peri-urban areas through partnerships with electricity distribution companies (DisCos) to develop 48 interconnected mini-grids that will inject about 288 megawatts of clean energy and battery storage into existing distribution networks.
“This demonstrates that decentralised energy is not competing with the grid; it is strengthening it,” he said.
He maintained that government support should be structured to create an electricity market that eventually requires less public intervention. “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 added.
Aliyu also envisioned a future where communities become centres of production rather than consumption through a resilient, investment-driven electricity market.
Earlier, the Managing Director of NewsDirect TV, Miss Shindara Ibiyemi, said the memorial lecture was organised to honour the legacy of her late father, Prince (Dr.) Samuel Ibiyemi, whose journalism career was marked by a deep passion for Nigeria’s energy sector.
She also announced the launch of the Samuel Folorunsho Ibiyemi Foundation, established to sustain the late editor’s legacy of supporting and uplifting others.
