How Nat’l Assembly new funding plan for rural electrification may lift millions out of poverty


There is a huge prospect for lifting over 80 million Nigerians from energy poverty as the National Assembly moves to provide a sustainable funding window for rural electrification through a review of the electricity power sector reform act of 2005.

By this development, many Nigerians who are not connected to the national grid in rural areas will witness improve access to power. This is expected to widen their economic opportunities.

Sanusi Ohiare, the executive director of Rural Electrification Fund who confirmed the planned review to Businessday, said the National Assembly gave the assurance after they were briefed of lack of sustainable funding option for rural electrification despite a financing window which was never adhered to by the Nigerian Electricity Regulatory Commission (NERC).

“The house committee on power has assured us that they will look into reviewing the Electricity Power sector Reform Act to strengthen our sources of funding, being the poorest fund in Nigeria.

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Also, engagements with the presidency, NERC and labour is ongoing in that regard,” Ohiare said.

He further noted that the initiative apart from having a direct economic bearing on rural economy, would also accelerate electricity access to over 80 million Nigerians, powering not just households but businesses as well, which would have ripple effect on jobs, income, productivity, thereby enhancing rural economic growth and development.

The Electricity Power Sector Reform Act empowers the rural electrification agency to implement the Nigerian Electrification Project (NEP), Engineering Economic Initiative, Engineering Education Programme, Rural Electrification fund, Energy database and capital projects.

But there are fears that these projects may not be successfully implemented unless there are sustainable funding options for rural electrification.

At the moment, most of the projects being undertaken for the rural electrification are either supported by the World Bank or African Development Bank, which industry analysts say lack sustainability.

Magaji Dawu, chairman House of Representatives committee on power, told BusinessDay that sustainable funding for rural electrification is a key component of President Muhammadu Buhari’s plan of lifting 100 million Nigerians out of poverty.

“Energy access has a direct economic impact on lifitng people out of poverty. This is why we must follow up on the request of the Rural Electrification Agency (REA) in ensuring that the NERC pays them the profits after their audited account, as “we look further to other ways of strengthening their sustainable funding options to deliver on their mandate.”

Segun Adaju, chief energy officer at Consistent Energy and the President of Renewable Energy Association of Nigeria (REAN), told Businessday that sustainable funding option for the rural electrification agency is key in moving millions of Nigerian people out of poverty as the government has canvassed.

Apart from the sustainable funding options for the rural electrification agency, there are still concerns on how Customs duty and levies are impacting negatively in driving the renewable energy sector, emphasising that there is need for the government to intervene.

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