Nigeria House: National Authority for Renewable Energy Bill Passes 2nd Reading

• The Nigerian House of Representatives passed the Electricity Act (Amendment) Bill, 2025, for a second reading.
• The bill proposes establishing the National Authority for Renewable Energy (NARE) to regulate, develop, and promote renewable energy in Nigeria.
• NARE would assume renewable energy functions currently handled by NERC, REA, and the Rural Electrification Fund.
• A key provision allocates 40% of the annual Rural Electrification Fund to NARE for renewable energy development.
• The bill aims to address institutional gaps and promote decentralized power solutions, especially for unserved communities.

This consolidation, according to Ogene, will foster improved coordination, minimize functional overlaps, and provide a clearer, more focused direction for the development of renewable energy.

The Nigerian House of Representatives recently advanced a significant piece of legislation, the Electricity Act (Amendment) Bill, 2025, by passing it for a second reading. This proposed law aims to establish a new regulatory body, the National Authority for Renewable Energy (NARE), with the core mandate to coordinate the regulation, development, and promotion of renewable energy initiatives across Nigeria.

Sponsored by Afam Ogene, who represents the Ogbaru Federal Constituency in Anambra State and chairs the House Committee on Renewable Energy, the bill underwent debate before its unanimous adoption on Thursday. This legislative step signals a concerted effort to address long-standing institutional gaps within the nation's power sector, particularly concerning the burgeoning renewable energy landscape. The Nigeria National Authority for Renewable Energy bill is seen as a pivotal move towards a more structured and efficient approach to green energy development.

The proposed NARE establishment Nigeria is designed to centralize functions currently dispersed among various entities. Specifically, the bill seeks to transfer renewable energy responsibilities from the Nigerian Electricity Regulatory Commission (NERC), the Rural Electrification Agency (REA), and the Rural Electrification Fund (REF) to the new authority. This consolidation, according to Ogene, will foster improved coordination, minimize functional overlaps, and provide a clearer, more focused direction for the development of renewable energy.

Under the provisions of the Electricity Act (Amendment) Bill, 2025, NARE would be tasked with actively promoting renewable energy projects, with a particular emphasis on mini-grid and off-grid electricity systems. These systems are crucial for serving rural, unserved, and underserved communities, as well as island settlements. Furthermore, the authority would be empowered to stimulate local manufacturing, research, and technical capacity development through a range of financial, fiscal, and regulatory incentives, designed to attract investment and create employment opportunities within the sector. The bill also advocates for a broader energy mix, encompassing solar, wind, hydro, geothermal, biomass, and hydrogen energy sources.

A key aspect of the proposed Nigerian renewable energy regulation is NARE's authority over various market functions. The body would oversee licensing, establish industry standards, promote fair tariffs, and manage dispute resolution within the renewable energy market. To ensure policy coherence and facilitate the seamless integration of renewable energy into the national grid, NARE is expected to collaborate closely with NERC and the Federal Ministry of Finance. This integrated approach is critical for the success of the Nigerian power sector reform bill.

Financially, the bill includes a significant provision for the new authority: 40 percent of the annual funds from the Rural Electrification Fund are proposed to be allocated directly to NARE. This substantial Rural Electrification Fund allocation is intended to provide dedicated financing for renewable energy development, underscoring the government's commitment to this sector. Afam Ogene emphasized that relying solely on national grid expansion is insufficient to resolve Nigeria's pervasive electricity challenges, especially in communities beyond the reach of reliable grid infrastructure, highlighting the necessity of innovative, decentralized solutions.

The establishment of NARE through this Nigerian power sector reform bill is anticipated to place a greater institutional emphasis on decentralized power generation. This includes systems capable of supplying electricity to households, businesses, and public facilities in areas with limited or no grid access, thereby expanding energy access across the nation. Following extensive deliberations, the House unanimously adopted the bill for its second reading and subsequently referred it to the relevant committee for further legislative scrutiny.

This committee is now tasked with a thorough examination of the bill's provisions, including the proposed transfer of personnel, assets, and ongoing projects from existing institutions to the new authority, before presenting its report back to the House. The legislative push for the Nigeria National Authority for Renewable Energy bill comes amidst ongoing national efforts to tackle Nigeria’s persistent electricity supply challenges and enhance access to power through diverse alternative energy sources, particularly solar power and mini-grids, which offer viable electrification pathways for remote and difficult-to-reach communities.

Lawyers and compliance officers in Nigeria's energy sector should closely monitor the progress of the Electricity Act (Amendment) Bill, 2025. Its potential passage will establish a new regulatory body, the National Authority for Renewable Energy (NARE), centralizing oversight of renewable energy projects and necessitating a review of compliance strategies for clients involved in licensing, standards, tariffs, and dispute resolution within this evolving sector.

Source: Original reporting via The Punch