Nigeria’s energy sector appears to be on the brink of transformation, with new signals suggesting that commercial banks are now more willing to finance renewable energy projects than ever before. Yet, poor-quality business proposals and controversial government policies continue to cast a shadow over the prospects of widespread adoption of clean energy.
At the 2025 Lagos Energy Summit, the Managing Director of the Rural Electrification Agency (REA), Abba Aliyu, said financial institutions are increasingly open to backing solar and other renewable energy ventures. However, many potential beneficiaries, particularly in the private sector, continue to present proposals that do not meet the most basic financial standards required for funding.
“I’ve never been a spokesperson for banks, but I can confidently say that they are ready to fund renewable energy,” Aliyu said. “My position allows me to see the transactions firsthand, and I can confirm their commitment.”
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According to him, banks are adopting more innovative energy financing models and are looking for credible projects to fund. But these opportunities are often missed due to poorly structured proposals that fail to demonstrate viability or repayment potential.
“Some business plans are not just poorly written—they lack alignment between financial statements and revenue models. If we want banks to act, we must first do the groundwork right,” he said, urging developers to seek expert guidance to align proposals with investor expectations.
Solar Ambitions Undermined by Import Ban Push
Aliyu’s remarks come at a time when the federal government’s policy direction on renewable energy, particularly solar, has sparked heated debate. Earlier this year, the government announced plans to ban the importation of solar panels and inverters, a move aimed at promoting local manufacturing.
The policy, however, has been widely criticized by energy experts, industry players, and stakeholders who argue that it could stifle the growth of Nigeria’s solar sector at a time when millions remain cut off from the national grid.
While the government says the plan is to boost local capacity, experts warn that Nigeria currently lacks the industrial base to produce solar panels at scale. Worse still, the country’s epileptic power supply has made solar energy a critical lifeline for households, businesses, and health facilities.
The proposed import restriction has raised fears that solar expansion could slow, especially in underserved rural areas that rely heavily on donor-funded or private sector-led solar mini-grid projects. For many of these efforts, imported components are still essential.
Stakeholders at the summit stressed that while the intention to boost local production is noble, a ban without first building domestic capacity and supply chains, risks being counterproductive.
The Economic Toll of Energy Poverty
Beyond policy bottlenecks, the summit also highlighted the broader economic implications of Nigeria’s persistent energy crisis.
Dr. Lateef Akanji, a Chartered Petroleum Engineer and Senior Lecturer at the University of Aberdeen, warned that the country’s low electricity access, only 33% of Nigerians have reliable power, has already cost the economy an estimated $26.2 billion annually.
He said energy poverty remains the greatest barrier to Nigeria’s economic growth. We’re sitting on vast energy resources, both fossil and renewable, but we’ve failed to convert them into meaningful, accessible electricity.
He praised Lagos State for its proactive efforts in pushing clean energy initiatives and creating a conducive investment climate. Still, he said the national conversation needs to shift toward building capacity in renewable energy through workforce development, training, and technology transfer.
Akanji also called on the government to explore green bonds and provide upfront capital investment in critical energy infrastructure, particularly in off-grid and hybrid systems.
In a sector notorious for infrastructure decay, attention also turned to how regulatory systems can be strengthened to ensure sustainability.
Engr (Dr) Oluwaseun Fadare, Commissioner for Engineering and Standards at the Lagos State Electricity Regulatory Commission, said maintenance and accountability must become central pillars of energy policy.
He proposed a regulatory framework that includes enforcement of mandatory maintenance standards, penalties for non-compliance, incentives for exemplary performance, and the integration of real-time monitoring technologies.
He also advocated for the creation of an emergency maintenance fund and an independent regulatory oversight body to ensure transparency and fast responses to infrastructure breakdowns.
“Combining mandatory standards, technological advancements, incentives, and penalties, these regulatory measures can effectively enforce adequate maintenance and promote long-term sustainability,” Fadare said.
REA Moves to Protect Billions in Public Solar Assets
Meanwhile, the REA is already taking steps to prevent renewable infrastructure from falling into disrepair. The agency recently received approval to establish a renewable asset management company to oversee its growing portfolio of solar investments across the country.
Aliyu said the new company will be tasked with managing infrastructure worth nearly $500 million—mostly deployed to public universities and federal institutions. The move, he said, is aimed at ensuring longevity and functionality.
“Too many public projects in Nigeria collapse after commissioning. This is about safeguarding investments and ensuring they deliver value over time,” he said.
He also disclosed that President Bola Tinubu has approved N100 billion for the National Public Sector Solarisation Project, a flagship initiative aimed at cutting the cost of governance by transitioning government institutions from diesel generators to solar energy.
“This is one of the most strategic interventions we’ve seen in recent years,” Aliyu noted. “But its success will depend on coordinated execution, competent operators, and an honest reassessment of our policy priorities.”
Nigeria’s energy landscape is marked by urgency. As the country struggles with frequent national grid failures, rising energy costs, and growing public frustration, the transition to renewable energy is no longer just an environmental necessity—it is a developmental imperative.
The emerging willingness of banks to support clean energy signals an opportunity, but it is one that could slip away unless structural gaps are addressed.