REA Boss Warns New NARE Structure Risks Derailing Nigeria's Electricity Momentum

Dr. Abba Aliyu, Managing Director and Chief Executive Officer of the Rural Electrification Agency (REA), has argued that creating a new National Agency for Rural Electrification (NARE) structure risks derailing the momentum Nigeria has built in decentralised and rural power delivery.

In an opinion published on Monday, October 19, Aliyu contended that public intervention remains essential in communities where electricity could transform agriculture, healthcare, education and local enterprise, but where customer density, purchasing power or initial demand may not immediately produce commercially attractive returns.

The viability gap argument

Aliyu's central point is about market failure, not ideology. In densely populated commercial districts, mini-grids and embedded generation can stand on commercial returns. In dispersed rural communities, the same technologies often cannot — at least not without a public subsidy or blended finance structure that de-risks the first phase of deployment.

Public intervention, in this framing, bridges the viability gap until demand grows, appliances proliferate and local enterprise creates enough paying load to sustain the asset without continuous subsidy.

Why restructuring at this moment matters

Nigeria's decentralised power sector has only recently begun to scale. Mini-grid regulations have been clarified, the Gombe solar and multi-site mini-grid projects commissioned this month illustrate delivery momentum, and development partners have channelled financing into off-grid and distributed solutions.

Restructuring the institutional architecture mid-scale-up introduces uncertainty: staff dispersal, project pipeline disruption, renegotiated development partner agreements and a pause in licensing decisions. Whether a new structure improves coordination or simply resets the learning curve is the unresolved question.

What should drive the design

If institutional reform proceeds, Aliyu's essay implies the design test should be whether the new structure preserves the REA's ability to close commerciality gaps in underserved communities, or concentrates instead on areas already attractive to private developers.

Electricity access targets and the productive-use investments that make demand bankable cannot wait for an administrative reorganisation to conclude. The cost of a wrong structure is measured in communities that stay dark while the policy debate continues.