The Rural Electrification Agency (REA) is calling for changes to Nigeria’s mini-grid regulations, saying current limits are slowing efforts to expand electricity access in rural communities.

Managing Director Abba Aliyu explained that the current cap of one megawatt per mini-grid discourages large-scale private investment, which is crucial for making projects sustainable and profitable. “Investors prefer bigger projects because they offer better returns and long-term sustainability, even though they come with higher risks,” he said.

To address this, the REA has asked the electricity regulator to raise the cap to between five and ten megawatts. Aliyu noted that several smaller African countries already allow mini-grids of much higher capacities, helping them expand electricity access more efficiently.

The regulator has already granted special approvals for some ongoing projects, allowing interconnected mini-grids to exceed the one-megawatt limit. In some states, projects are now being developed with capacities of over nine megawatts.
Aliyu added that financing remains another major challenge.

Government funds alone cannot meet the country’s electricity needs, so the REA is introducing innovative financing models to attract private investment. He emphasized that rural electrification should be seen as a business opportunity, capable of generating returns while providing essential infrastructure.