The Renewable Energy Bill: Redefining Electricity Access, Investment and Sustainable Development

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By Oke Epia, E-mail: sostainability01@gmail.com  | WhatsApp: +234 8034000706

Trends and Threads

By Mmachi Okafor

Nigeria’s efforts to strengthen its renewable energy sector could take a significant turn with the proposed Electricity Act (Amendment) Bill, 2025, which seeks to establish a dedicated regulatory authority responsible for overseeing the development, promotion, and utilisation of renewable energy resources across the country.

Sponsored by Hon. Afam Victor Ogene, the bill proposes amendments to the Electricity Act, 2023, with the primary aim of restructuring the regulatory framework governing renewable energy generation, distribution, investment and consumption in Nigeria.

At the centre of the proposed legislation is the establishment of the National Authority for Renewable Energy (NARE), an independent regulatory institution that would assume key responsibilities currently assigned to the Nigerian Electricity Regulatory Commission (NERC), the Rural Electrification Agency (REA) and the Rural Electrification Fund (REF).

The bill seeks to centralise regulatory and supervisory responsibilities relating to renewable energy under a single institution, creating a more coordinated framework for the development and utilisation of renewable energy resources.

The scope of the proposed legislation extends beyond electricity generation to include renewable energy infrastructure development, licensing, distribution, investment promotion, technological innovation, consumer protection, rural electrification and the establishment of regulatory standards.

Under the proposed framework, NARE would oversee activities involving renewable energy technologies such as solar, wind, hydro, geothermal, biomass, hydrogen, tidal and wave energy. The authority would also promote research into emerging technologies and establish technical standards to support the efficient generation and utilisation of renewable energy.

A major component of the bill is its emphasis on expanding electricity access to underserved and unserved communities, particularly in rural areas where inadequate power infrastructure continues to limit economic opportunities and social development.

To address this challenge, the legislation proposes the promotion and implementation of mini-grid and off-grid renewable energy systems in remote communities, islands, and other locations with limited access to conventional electricity networks.

The proposed expansion of decentralised electricity infrastructure is intended to improve access to power while encouraging the productive use of renewable energy in communities that have historically remained outside the reach of reliable electricity services.

The bill also identifies bioenergy technology as an important component of rural electrification, reflecting its broader objective of diversifying Nigeria’s energy sources and reducing excessive dependence on conventional electricity generation.

Beyond expanding electricity access, the proposed legislation seeks to create a favourable investment environment capable of attracting private-sector participation in renewable energy development.

It empowers the proposed authority to facilitate financial, fiscal, regulatory and risk-sharing incentives for local producers of renewable energy products. These measures are intended to encourage domestic production, stimulate investment and support the growth of renewable energy businesses.

The legislation further provides for collaboration between NARE and the Federal Ministry responsible for Finance to introduce tax incentives and relief measures that would encourage renewable energy generation, consumption and project implementation.

Such incentives could help reduce financial barriers facing renewable energy developers, although their effectiveness would depend on the specific fiscal policies adopted and the consistency of their implementation.

Another significant objective of the bill is to establish a structured regulatory environment for renewable energy operators and consumers.

Under the proposed arrangement, NARE would be responsible for licensing and regulating individuals and organisations engaged in renewable energy generation, distribution, supply and trading. It would also approve projects, establish operating codes, monitor compliance and resolve disputes within the industry.

The authority would have powers to enforce regulatory standards, inspect licensed facilities and impose sanctions for violations of operational requirements.

These provisions are intended to promote accountability, improve service delivery and ensure that renewable energy activities operate within an established legal and institutional framework.

Consumer protection also forms an important part of the legislation. The bill proposes the establishment of appropriate consumer rights and obligations while requiring renewable energy pricing and tariffs to be fair and balanced for consumers, investors, licensees and other stakeholders.

This approach seeks to balance the commercial interests of renewable energy investors with the need to make electricity services accessible and affordable to consumers.

The proposed legislation also recognises the importance of coordination between renewable energy regulators and existing electricity institutions.

Although NARE would assume major responsibilities for renewable energy regulation, the bill provides for collaboration with NERC on regulatory standards, licensing procedures, grid connections, power purchase agreements, tariffs, policy development and dispute resolution.

This arrangement is intended to support the integration of renewable electricity into Nigeria’s wider power system while maintaining coordination between the proposed renewable energy authority and existing electricity-sector institutions.

However, the success of this framework would depend on clearly defined responsibilities and effective cooperation between the institutions to prevent overlapping mandates, regulatory uncertainty and administrative delays.

A particularly significant provision of the bill concerns the financing of the proposed authority.

The legislation seeks to allocate 40 per cent of the Rural Electrification Fund’s annual resources to NARE for renewable energy development and associated activities. It also identifies licensing fees, charges, National Assembly allocations and other lawful sources of income as potential funding channels for the authority.

This proposed funding arrangement is designed to provide financial resources for renewable energy programmes, infrastructure development and regulatory operations.

Nevertheless, transferring a substantial proportion of the Rural Electrification Fund to a new institution raises important questions about the financial implications for existing rural electrification programmes and the need to ensure that resources continue to reach communities requiring electricity access.

The bill also provides for the establishment of a governing board responsible for overseeing the authority’s policies, finances and institutional administration.

The proposed board would include representatives from Nigeria’s six geopolitical zones, relevant federal ministries, the Central Bank of Nigeria, the Renewable Energy Association of Nigeria and Women in Renewable Energy.

The inclusion of these stakeholders reflects an intention to promote broader institutional participation in renewable energy governance.

Furthermore, the legislation seeks to encourage gender mainstreaming and local content development within the renewable energy industry.

These provisions could create opportunities for greater participation by women, indigenous businesses, technical professionals and local manufacturers in the expanding renewable energy market.

Research, innovation and capacity building also feature prominently among the bill’s objectives.

The proposed authority would be responsible for promoting research into renewable energy technologies, supporting infrastructure development, establishing technical standards and implementing programmes aligned with international best practices.

By encouraging technological advancement and skills development, the bill seeks to strengthen Nigeria’s capacity to develop and utilise renewable energy resources while supporting the emergence of a more competitive domestic renewable energy industry.

Public education is another important aspect of the proposed legislation. NARE would be expected to promote awareness of renewable energy production and consumption, helping individuals, communities and businesses understand the opportunities associated with alternative energy technologies.

The bill also extends its attention to renewable energy projects beyond electricity generation, providing a broader framework for the productive utilisation of renewable energy resources across different sectors of the economy.

From an economic development perspective, the legislation presents opportunities to support investment, expand energy infrastructure, stimulate local manufacturing and improve electricity access for businesses and households.

Reliable renewable electricity could support small businesses, agricultural processing, healthcare facilities, educational institutions and other economic activities, particularly in communities where inadequate power supply remains a major obstacle to development.

However, these potential benefits would depend on the successful implementation of the proposed regulatory reforms, adequate financing, transparent project management and effective coordination among relevant government agencies.

The bill’s central objective is therefore not simply to promote renewable energy adoption but to restructure the institutions responsible for regulating and developing the sector.

By proposing a dedicated national authority, the legislation seeks to establish a more coordinated system for renewable energy governance, strengthen regulatory oversight, encourage investment, expand electricity access and promote the sustainable utilisation of Nigeria’s renewable energy resources.

Nevertheless, the proposal raises important policy questions about whether creating another regulatory institution would improve efficiency or introduce additional administrative costs and institutional complexities.

The transfer of responsibilities from established electricity-sector agencies would require careful management to ensure continuity in existing programmes, prevent duplication of functions and protect investments already committed to renewable energy development.

Ultimately, the Electricity Act (Amendment) Bill, 2025, represents a proposed institutional reform aimed at strengthening Nigeria’s renewable energy sector through centralised regulation, investment incentives, technological development and expanded electricity access.

Its potential contribution to economic growth and sustainable development would depend not only on the establishment of NARE but also on the effectiveness of its regulatory framework, the transparency of its funding arrangements and its ability to translate legislative objectives into measurable improvements in electricity access.

For Nigeria, where electricity shortages continue to constrain productivity and economic opportunities, the significance of the proposed legislation lies in whether its institutional reforms can deliver reliable, affordable and sustainable energy to households, businesses and communities across the country.