Nigeria’s electricity infrastructure will be central to economic growth and the adoption of artificial intelligence, while a nationwide mapping exercise has identified more than 750,000 communities that require different forms of energy access, Rural Electrification Agency (REA) Managing Director Dr. Abba Aliyu said.
Electricity and the AI economy
Electricity supports development across the economy, including farming, healthcare, education and manufacturing. That role is becoming even more important as artificial intelligence expands, because the long-term trend is toward the electrification of virtually every activity.
Medical care will increasingly rely on AI-based systems, while precision farming is already using the technology. Manufacturing and other industries will also depend on it. Yet AI systems cannot operate without power: electricity is the basic infrastructure behind the computing capacity that produces an answer.
Platforms such as ChatGPT illustrate the point. Behind every response generated by an AI service is electricity consumed by the system. The direction of travel is therefore clear: access to electricity will increasingly shape what individuals and businesses can do.
Nigeria is seeking to keep pace with that shift, with the federal government aiming to extend electricity access to every citizen. Its approach is to support production rather than simply subsidise consumption. Through capital grants, the REA seeks to reduce the risks and upfront costs faced by private developers, which should also help lower tariffs.
Power for agricultural production
During its planning process, the agency identified government institutions and locations connected to three priority areas: agriculture, healthcare and education. In agriculture, the mapping exercise located production and processing clusters, with particular attention to post-harvest losses.
Those losses can be reduced by supplying reliable electricity for productive activities. A project in Namu, Quan’pan local government area of Plateau State, demonstrates the impact. Namu is a highly fertile rice-growing community, but its processing cluster had been using diesel-powered equipment.
High diesel prices, combined with other processing expenses, pushed the cost of a bag of rice above its market value. The product could therefore not compete once it reached the market.
- Under the Africa Mini-Grid programme, the REA installed a 50-kilowatt pilot system that allowed one of the area’s largest rice mills to stop relying on diesel.
- The facility is now processing more than 200 bags of rice with power from the mini-grid, making its output competitive.
- The agency is expanding the installation to nearly 5 megawatts, roughly 1,000 times the pilot’s capacity, to supply the other 37 factories and the surrounding communities.
Separately, Adamawa State recently hosted the groundbreaking of 39 mini-grid schemes under the Distributed Access through Renewable Energy Scale-up (DARES) programme. The package consists of three interconnected systems and 36 standalone mini-grids.
Planning projects with national data
The REA’s project choices are guided by the completion of a countrywide energy map. The database shows where intervention is needed, the appropriate form of intervention and the technology that can deliver it most efficiently.
Nigeria has had about 16 presidents, and each administration entered office intending to improve electricity access. What had been missing, however, was a structured plan that identified the millions of people without power and set out how they would be connected.
The completed survey has identified more than 750,000 communities, ranging from Lagos State’s largest settlement, which contains more than 2.5 million households, to locations consisting of only two or three homes. The agency records the number of houses in each community and whether it is electrified, underserved or entirely without supply.
It also calculates the least-cost solution for each location. Depending on the circumstances, that may mean standalone solar systems, isolated mini-grids, interconnected mini-grids or an extension of the national grid.
Larger mini-grids under revised rules
Regulatory reform has expanded the scale of systems that can be deployed. Under the former mini-grid rules, the maximum permitted capacity was 1 megawatt, a limit the agency said was too restrictive for Nigeria’s needs.
The REA pointed to other African markets where private developers can build mini-grids of up to 50 megawatts, even though those countries face less severe electricity-access problems. After consultations and recommendations from the agency, the regulator revised the framework.
The new rules permit isolated mini-grids of as much as 5 megawatts and interconnected mini-grids with capacity of up to 10 megawatts.
Coordination with states
The agency has also developed a process for working with subnational governments under the Electricity Act. Last year, it established a State-by-State Roundtable, bringing state executive management teams led by their governors to Abuja together with private-sector participants and the REA.
The forum is intended to align state-level electricity plans with the agency’s programmes rather than serve as a ceremonial gathering. The process covered 27 states last year and is continuing with Anambra and Taraba, as well as the remaining states and the Federal Capital Territory.
The REA has also commissioned a 100-kilowatt solar mini-grid in Damau, Kubau local government area of Kaduna State.
Sustainability and financial access
Every mini-grid installed by the agency includes full metering and supervisory control and data acquisition (SCADA) equipment. These systems track the electricity generated by solar farms through to its use by households and businesses.
Reliable power can also draw new economic activity into rural communities. In one community in Abuja, there had been no business centre, point-of-sale outlet or comparable commercial facility before the mini-grid was installed. Once round-the-clock electricity became available, businesses opened and residents began purchasing meter credit through their phones.
The projects currently achieve collection rates of up to 97% and are supporting the growth of small and medium-sized enterprises.
The agency has moved away from the traditional model in which the government either builds public infrastructure itself or simply awards a contract. Its programmes are designed to embed long-term operating sustainability from the outset.
To support that model, the REA has built a private-sector ecosystem of Renewable Energy Service Companies, or RESCOs. These firms receive training to develop and operate renewable-energy infrastructure.
The agency also uses Result-Based Financing. Rather than handing a standard contract to a RESCO, it requires the company to raise debt or equity, use the agency’s data and select communities in which to build the required infrastructure.
Building a domestic solar industry
Nigeria cannot match China on the scale of solar-panel production. Worldwide, seven principal manufacturers account for about 75% of global solar photovoltaic panel capacity, and all seven are Chinese companies. Even advanced economies face difficulty competing with that production base.
The Nigerian strategy is therefore to secure a meaningful share of the value chain. The agency has signed a joint-development agreement covering 3.7 gigawatts of manufacturing capacity across the country.
- Four facilities are planned along the Lagos-Sagamu corridor.
- Two are planned in Kano.
- Two are planned in Akwa Ibom.
- One is planned in Bayelsa.
- Two facilities in Lagos have already begun operations.
The REA is also seeking to create demand for equipment manufactured by Nigerian companies. Levin Energies, a photovoltaic manufacturer in Ikotun, Lagos, already has annual capacity of 150 megawatts. It sells in Nigeria and exports products to Accra, Ghana.
Abuja already has more than 400 megawatts of solar-manufacturing capacity. With further investment, Nigeria aims to become a regional centre for renewable-energy manufacturing in the near future.
