A Case for Nigerian Component State Governments to Develop Off-grid Renewable Policies and Agencies to Improve Power Generation in the Country

A Case for Nigerian Component State Governments to Develop Off-grid Renewable Policies and Agencies to Improve Power Generation in the Country

The National Electric Power Policy (“NEPP”) 2001, is the precursor to the Electric Power Sector Reform Act (“EPSRA”). One of the objectives, of the NEPP, is the expansion of access to electricity supply in a cost-effective manner. The EPSRA (pursuant to the NEPP) was enacted, primarily, to establish the legal foundation for the reform of the Nigerian Electricity Supply Industry (“NESI”). The EPSRA takes things notches higher (than the NEPP) in connection with off-grid rural electrification, with the creation of the Federal Rural Electrification Agency (“FREA”), which is a federal agency charged with designing and implementing strategies to achieve rural access to electricity.

Although, the EPSRA establishes the FREA and provides the framework for the Federal Government of Nigeria (“FGN”)’s objectives, goals and policies regarding rural electrification, there are only a few details on its implementation. The FGN’s Rural Electrification Policy (the “Policy”) developed by the Federal Ministry of Power, Works and Housing, outlines the FGN’s objectives, goals and policies regarding rural electrification. The Policy details the institutional framework and procedures to be pursued in order to achieve the objectives of the government’s rural electrification program.

One goal of the Policy (which is expressly elucidated, in the Policy document) is to encourage states to develop and contribute financially to rural electrification. Thus, the writer believes that steps should be taken by component Nigerian States in line with the overall objective of the FGN, in connection with rural electrification. The implementation of rural electrification programs of each component Nigerian State should as far as possible, encourage the decentralized configuration approaches (such as mini-grids and stand-alone systems) by making use of all resources (financial, technical and human) available at Federal, State and local levels.

Thus, this piece is written, to show cause why it is crucial for each Nigerian component State to set up its own Rural Electrification Agency and other matters connected therewith.

A. Power of Component Nigerian States to Create Rural Electrification Agencies

The powers of a state to make laws are contained in the Constitution of the Federal Republic of Nigeria of 1999 (the “Constitution”). It is pertinent to note that electricity is in the Concurrent Legislative List of the Constitution. Pursuant to item 14 of the Constitution, and the current Policy of the FGN on rural electrification (which the FREA has agreed includes the right of different States in Nigeria to establish their own rural electrification agencies to support the current efforts of the FGN) each component Nigerian State will appear well within its rights to establish its own Rural Electrification Agency. Thus, each Nigerian component State may pass legislation creating their State Rural Electrification Agency (“SREA”).

The writer believes that Nigerian component States have the power to create their own rural electrification agencies and a number of Nigerian component States (like Lagos) are, indeed, ripe to set up their own SREA to complement and support the efforts of the FGN.

B. Plausible Powers of an SREA

The SREA would be similar in functions and powers to the FREA. The SREA’s mandate will however, be to implement each State’s rural electrification strategy and plan under the supervision of the Ministry of Energy or Power (depending on the nomenclature or structure already in place or considered to be set up). The SREA’s key objectives will be to increase electricity access and to accelerate service penetration across the relevant component State to meet development goals. Key components should include the mini-grid regulations, off-grid solutions such as rural mini-grid solutions, stand-alone, isolated solar home systems, captive generation and eligibility. The SREA will also set targets for rural electrification access in line with the Ministry’s overall electricity objectives.

The State’s strategy can take its cue from and in collaboration with the FREA by expanding the national grid to rural areas, development of isolated and mini grid systems, and renewable power generations. In doing this, the SREA will also take into careful consideration the provisions of the Mini-Grid Regulations which have been recently approved by the Nigerian Electricity Regulatory Commission.

The FREA also administers the Rural Electrification Fund, allowing for the possibility of a state rural electrification fund. Through public and private sector participation, such a fund may be used to promote, support and provide rural electrification programs, with a view to particularly developing and expanding access to off grid electrification among others.

C. Potentials and Benefits of Rural Electrification to Residents of Various States

It is projected that only about 26% of rural families in Nigeria have access to electricity and with proper market and regulatory instruments, these resources may be used to deliver a dependable source of electricity to all residential, industrial, commercial, and public consumers in Nigeria, at cost-reflective yet, reasonably affordable tariffs.

The Benefits of Rural Electrification

Rural households can dedicate less time and income to obtaining energy supply, in pursuit of more fruitful uses, instead. Improved access to electricity in rural communities is likely to have a substantial effect on the quality of health services, education, and access to information and communication technology. With reliable and reasonably affordable electric supply in place, these rural communities can develop their productive capacity in the manufacturing sector, agriculture and agro-allied services, light and heavy industries.

The forgoing will put any component Nigerian State that follows through with its plans on rural electrification, in good light amongst its peers and the people in rural areas will see this as one good dividend of democracy which will be a plus for its current administration and lend credence to the belief that any relevant administration is performing.

The relevant SREA may come up with an off-grid program that will accelerate electricity access mainly in rural areas. This program should consist of the following:

i. Rural mini-grids: This component would fund the electrification of unserved and underserved areas that have high economic potential. The focus would be on solar-based mini grids, which can later be integrated with distribution companies. Electricity can also be provided to a realistic number of households.

ii. Stand-Alone Home Solutions: This component would provide Solar Home Systems (SHS) and solar lanterns, among other products, for areas where mini-grids are not viable. The stand-alone solutions may include individual photovoltaic (PV) systems that can provide sufficient electricity to satisfy the needs of households and small commercial enterprises (e.g., lighting, radio, TV, fan). These systems will provide critical services to the hardest-to-reach customers.

iii. Reliable power for the relevant State’s university, polytechnic, college of education and teaching hospitals. The focus will be on developing an ‘energising education programme’ for the relevant State’s Polytechnic, University and College of Education, respectively. The objective would be to provide new or improved electricity service to the relevant State’s university, polytechnics, college of education and university teaching hospital (including street lighting for illumination of campuses). The power will come from off-grid systems ranging from 1 MW to 10 MW.

iv. Customer Eligibility:  Customers that utilize more than 2 MW of energy from the national grid have the right to competitively purchase electricity directly from generation companies


The writer believes that, to substantially improve rural electrification and to also enhance the economic capacity of rural dwellers via electrification, there is a need for a collaborative effort between Nigerian component States and the federal Rural Electrification Agency. As many component Nigerian States as possible should put policy in place to improve power availability inclusiveness, in their States especially with respect to rural dwellers who are mostly in the informal sector of the Nigerian economy. This is so because the informal sector is the driver of employment and sustainable economic empowerment and stable electricity which is not too expensive plays a crucial role in achieving this.

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