November 02, (THEWILL) — The Nigerian Electricity Regulatory Commission (NERC) has called on the Federal Government to redirect the $2 billion fund managed by the Rural Electrification Agency (REA) toward powering industrial clusters, saying Nigeria’s economic revival depends on reliable energy for production rather than just household access.
Speaking at the Commission’s 20th-anniversary event in Abuja, NERC Vice-Chairman Musiliu Oseni argued that while rural electrification remains essential, the focus should shift toward industrial-scale power generation and distribution that can sustain factories, create jobs, and drive export growth.
“We need a deliberate policy that ensures a substantial portion of the funds available to the REA is channelled into end-to-end power solutions for industrial clusters,” Oseni said. “You can power access, but you cannot power the economy to prosperity without industrial-scale electricity supply.”
The REA currently manages about $2 billion in development funding from multilateral partners including $750 million from the World Bank’s DARES programme, $200 million from the African Development Bank (AfDB), and $190 million from the Global Energy Alliance for People and Planet, with another $800 million under negotiation.
Originally earmarked for rural and off-grid electrification, these funds could, under NERC’s proposal, be reallocated to support manufacturing corridors such as Lagos, Ogun, Kano, and Nnewi, where power deficits have constrained productivity and investment growth.
Nigeria’s grid currently delivers an average of 4,000–5,000 megawatts (MW) to an economy of over 200 million people, leaving industries dependent on costly diesel and gas generators. Redirecting part of the REA’s funding, experts say, could reduce industrial energy costs, improve capacity utilisation, and attract private investment into renewable-hybrid projects serving dedicated industrial parks.
Oseni clarified that the goal is not to abandon rural electrification but to adopt a balanced approach that powers both homes and industries. “Industrial clusters can include agro-processing zones in rural regions,” he explained. “Powering production there benefits entire value chains.”
The proposal aligns with the Electricity Act 2023, which decentralises regulation and allows states to license generation and distribution operators. NERC believes that combining these reforms with targeted investment could help close Nigeria’s $100 billion power-infrastructure gap and stimulate inclusive economic growth.
However, execution, transparency, and governance will determine the policy’s success, given past lapses in managing development funds. If effectively implemented, NERC’s proposal could mark a pivotal shift from lighting homes to powering industries positioning electricity as a catalyst for productivity and competitiveness in Africa’s largest economy.
Ogochukwu Onwaeze
