NERC: W’Bank Must Reconsider Investment of $750m Fund Solely on Off-grid Power

• MAN: 30% of members off grid, 25% planning exit, self-generation hits N1.3tn •Stakeholders meeting on powering manufacturing underway The Chairman of the Nigerian Electricity Regulatory Commission (NERC), Dr. Musiliu Oseni, has questioned the concentration of World Bank funding to off-grid rural electrification projects while grid-connected industrial centres suffer poor supply, calling for a split of the facility to support both rural access and industrial electrification. Oseni spoke in Lagos at the Nigeria Energy Exhibition and Conference 2026 during a panel on: “Distribution Sector Reform: The Case for Recapitalisation, Consolidation or Franchise Restructuring”. The intervention under scrutiny is the $750 million Distributed Access through Renewable Energy Scale-up (DARES) programme managed by the Rural Electrification Agency (REA), approved by the World Bank in December 2023 to provide new or improved access to 17.5 million Nigerians through 1,350 mini-grids including 250 interconnected mini-grids. But speaking at the session, Oseni said the fund was good but priorities must be interrogated when industries yearn for quality supply to industrialise the economy. “There is a need for us as a country to look at repurposing some funds we are getting from the World Bank. Currently, we have fund for rural electrification and so on. It’s good, but when you have your connected population suffering poor quality of supply, you definitely need to step back and say, which ones would come first to industrialise my economy,” Oseni said. “You have the industries that are demanding or that are yearning for improvement in quality of supply. Can we divide that money and say, half should go to rural electrification while half is used to solve both the transmission and the distribution bottleneck to the industrial center,” he added. He said that conversation must happen nationally. He noted that Lagos which should take 1,300-1,400 megawatts of supply on a normal day is now getting about 700MW due to transmission tripping, masked because transmission has no direct interface with public. He said investors have walked away even from some of the best Distribution Companies (Discos) in Nigeria after looking at their books showing significant losses, with no clear recovery pathway. “If I’m to put my money down, what is in it for me? What is the risk of recovery… Without addressing the risk of investment facing the sector, it is going to be a bit difficult,” Oseni said, noting N500 billion minimum investment by Discos would have tariff implications. He argued that consolidation as in banking is difficult in power sector under the Electricity Act 2023 which has further disaggregated Discos along state lines. He cited Ibadan Disco covering five states but now broken into five or six states, making the talk about merger of Ibadan with Eko or Ikeja Discos impractical. “So that means that probably we talk about restructuring more now or maybe capital injection,” he said. He said he sees more opportunity in franchising, citing two approved transactions for Kaduna Disco in Zamfara and Southern Kaduna with Access Power which mapped enumeration and investment needs. Oseni challenged manufacturers on willingness to pay premium for reliable grid against diesel alternative. “The representative from the manufacturers’ association quoted a figure of N1.3 trillion they spent on diesel in 2025… if it is N1,500 per litre, that means fuel cost per kilowatt hour is N500. Will the manufacturer’s association be willing to pay a little premium on grid supply for better quality of service?” He called for closed-door stakeholder discussion on powering industrial clusters, noting many industrial customers connected at 132kV transmission lines still suffer outages. “Many industrial customers are connected at 132kv lines which is a transmission line, but some of them still experience supply issues. So, it goes beyond distribution. It’s about us locking ourselves in the room and talking sense to ourselves,” he said, adding government may need to transparently focus money on transmission to industrial sector. Speaking earlier, Director of Research and Economic Policy, Manufacturers Association of Nigeria (MAN), Dr Oluwasegun Osindipe, said cost-reflective, not service-reflective tariff currently exists in the power sector. “From the users’ perspective, what we have currently is not service-reflective tariff. The regime we’re experiencing now is cost-reflective tariff. Because we have a situation where other costs, even transmission losses, are built into,” Osindipe said. He said in 2025 alone manufacturers spent over N1.3 trillion on self-generated energy excluding grid bills, driven by incessant outages and grid collapses that disrupt production, damage sensitive machines and create waste. “Just 2025 alone, manufacturers expended over N1.3 trillion on alternative energy… It’s because of incessant power outages… Any blink on some majority of the machines will lead to disruption in production,” he said. He cited tariff shock from banding system, with Band A moving from N68 to N209 per kilowatt, over 230 per cent increase, without promised hours, and with members experiencing six to eight outages daily. “Imagine a manufacturing concern experiencing up to between six and eight power outages in a day. So that, to a larger extent, is affecting manufacturing performance,” he said. He warned that over 30 per cent of manufacturers have moved off grid, with another 25 per cent midstream in implementing plans to domesticate resource-efficient and cleaner production, implying additional exit. “From available data from my association, over 30 per cent of manufacturers have moved from the grid… And I can also authoritatively tell you between 2025 and to date, another 25 per cent are midstream on implementing their programme to fully domesticate… What that means is additional 25 may also go off-grid,” Osindipe said. He said such exodus of maximum demand users does not paint good picture for investors and capital flow, adding that whether consolidation, recapitalisation or restructuring, “I think we need a little bit of all.”