The Federal Government of Nigeria has allocated N100 billion for the installation of solar mini-grids in public institutions, a move aimed at addressing the country’s worsening power supply challenges and reducing the high cost of diesel and generator maintenance.

The initiative, known as the National Public Sector Solarization Initiative, is embedded in the 2025 budget and is expected to significantly cut government expenditure on electricity consumption, which has become a major financial burden on ministries, departments, and agencies (MDAs).

This was disclosed by the Managing Director of the Rural Electrification Agency (REA), Abba Aliyu, during an interview on Channels Television’s The Morning Brief on Tuesday.

“If you also check within the budget, you’ll see a new initiative of Mr. President, which was presented by the Honourable Minister of Power, called the National Public Sector Solarization Initiative—a new concept designed to reduce the cost of governance. A N100 billion has been allocated for it,” Aliyu stated.

Aliyu explained that once the 2025 budget is passed and signed into law by President Bola Tinubu, the REA will commence work on the project to ensure that government institutions have access to reliable, cost-effective, and environmentally friendly electricity.

The solar mini-grid initiative has been lauded as a potential solution to the persistent blackouts in government institutions, many of which have been disconnected by electricity distribution companies (DisCos) over unpaid bills.

Among the worst-hit institutions are medical facilities, where power supply disruptions have endangered lives. A striking example is the University College Hospital (UCH), Ibadan, which has been without electricity for over 100 days. The power crisis at UCH has crippled essential medical services, forcing patients to provide their own generators for any treatment requiring electricity.

Aliyu acknowledged the dire situation at UCH and noted that the hospital is among the key beneficiaries of the solar mini-grid project. He explained that UCH is part of five institutions selected for immediate intervention, alongside the University of Lagos, the University of Ibadan, Obafemi Awolowo University, the University of Nigeria, Nsukka, and Ahmadu Bello University.

With Nigeria’s power sector struggling to meet demand, institutions like universities and teaching hospitals have been forced to rely heavily on generators, leading to soaring operational costs.

Aliyu explained that the solar mini-grid deployment will prioritize hospitals and universities, ensuring uninterrupted electricity supply for critical operations. His agency plans to complete mini-grid projects for at least eight universities and one major teaching hospital within six months. In addition to this, sixty mini-grids will be commissioned across various public institutions, and forty interconnect grids will be deployed to enhance power reliability.

The Dire Need for Energy Reform in Government Institutions

For years, Nigeria’s public institutions have struggled with erratic power supply, forcing them to either operate under harsh conditions or divert significant portions of their budgets to diesel procurement and generator maintenance. Government data shows that MDAs spend billions of naira annually on energy costs, making it one of the largest overhead expenses in the federal budget.

“To address that, the funding is being provided for us to now solarize these institutions. That amount of expenditure in our national budget meant for diesel purchase, generator purchase, and repairs can be channeled to other relevant sectors of the Nigerian economy,” Aliyu said.

The crisis has been most severe in medical institutions, where power outages jeopardize the safety of patients. Surgical procedures and medical tests have been delayed or canceled due to a lack of electricity, while hospital costs have increased drastically as power shortages have driven up expenses for alternative energy sources.

The REA believes that solar mini-grids can permanently address these problems by providing stable and cost-effective power to hospitals, ensuring that life-saving treatments are not interrupted due to power failures.

The government’s decision to solarize public institutions is seen as a strategic response to Nigeria’s broader energy crisis, where the power supply remains grossly inadequate despite ongoing efforts to reform the electricity sector.

Aliyu highlighted successful past interventions by the REA, including the deployment of hybrid solar mini-grids to seven universities and two teaching hospitals. A notable example is the University of Maiduguri, where a 12-megawatt hybrid mini-grid has been installed. This system powers both the university and its teaching hospital, as well as Maiduguri’s only water treatment plant, showcasing the potential of solar energy to solve Nigeria’s public sector electricity crisis.

Can Solar Mini-Grids Solve Nigeria’s Public Sector Energy Woes?

The N100 billion solar mini-grid initiative has been widely welcomed, especially in sectors that have suffered from chronic power shortages. However, industry experts warn that successful implementation will require transparency, proper funding, and long-term maintenance strategies.

Despite the optimism surrounding the initiative, Nigeria’s history of abandoned energy projects raises concerns about sustainability. Many argue that without strict monitoring and accountability, the funds allocated for solarization could be mismanaged, leaving public institutions in the same dire situation.

Nevertheless, if fully implemented as planned, the initiative could significantly reduce government spending on energy, ensuring that hospitals and universities no longer rely on expensive diesel generators. It could also serve as a model for nationwide renewable energy adoption, potentially extending to residential and commercial sectors.

VFD Group Plc has announced a full-year pre-tax profit of N12.4 billion for 2024, marking a significant turnaround from the N1 billion pre-tax loss recorded in 2023.

This remarkable recovery, detailed in the company’s earnings report released on February 10, 2025, on the Nigerian Exchange (NGX), highlights strong revenue growth, strategic investments, and operational efficiency.

The company reported gross earnings of N83.2 billion, reflecting an 84.5% increase compared to the N45.1 billion recorded in the previous year. Net revenue rose sharply to N32.2 billion, representing a 164.15% year-over-year increase from N12.1 billion in 2023. The group’s total assets surged to N328.6 billion, a 49.90% increase from N219.2 billion, reflecting the company’s commitment to strengthening its financial base.

According to Group Managing Director and Chief Executive Officer, Nonso Okpala, the remarkable financial recovery was driven by strategic investments and divestments, which significantly boosted earnings and profitability.

“Strategic investments and divestments contributed to an increase in earnings and profitability this year. We have worked on reinforcing our financial resilience, expanding our investment portfolio, and improving our governance framework, with a focus on digital innovation,” Okpala said.

VFD Group’s investment income, which accounted for 85.54% of total earnings, rose by 107.62% to N71.1 billion. The increase was largely due to successful divestments, treasury interest, loan growth, and dividends from strategic assets. Other income, which accounted for 11.24% of gross earnings, rose by 31.60% year-over-year to N9.35 billion, with growth driven by logistics, hospitality, fair value gains, and foreign exchange gains.

The company also recorded net gains on financial assets at fair value totaling N2.65 billion, representing a 7.30% increase from N3.29 billion in the previous year. Additionally, the share of profit from associates was N30.04 million, contributing a small portion of total earnings.

One of the most notable improvements in the financial report was net investment income, which skyrocketed by 1,318.95% year-over-year, growing from N1.5 billion in 2023 to N21.7 billion in 2024. This substantial increase underscores the effectiveness of the company’s financial strategy.

VFD Group’s operating profit also rebounded to N11.3 billion, a stark improvement from the N4.1 billion loss recorded in the previous year. Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) surged by 119.08% year-over-year, reflecting improved operational efficiency and cost management.

The pre-tax profit of N12.4 billion marks a sharp reversal from the N1 billion loss in 2023, while the post-tax profit reached N10.4 billion, a substantial improvement from the N750 million loss recorded in the previous year. As a result of these gains, earnings per share (EPS) rose to N8.22 from a negative N3.95 in 2023, signaling a strong recovery for shareholders.

The company also recorded an increase in total assets, which rose by 49.90% year-over-year, reaching N328.6 billion from N219.2 billion in 2023. The significant growth in assets reflects VFD Group’s continued focus on enhancing its investment portfolio and strengthening financial stability.

A breakdown of key asset categories shows that investments in financial assets accounted for N189.8 billion, forming a significant portion of the company’s total revenue. Other holdings amounted to N58.1 billion, while investment properties stood at N35.8 billion, reflecting the company’s growing real estate interests. The company also held N24.4 billion in cash and cash equivalents, ensuring ample liquidity for future expansion and investment opportunities.

As part of its long-term strategy, VFD Group also successfully executed a rights issue of N12.5 billion, which led to a 90% increase in shareholders’ funds, now standing at approximately N61.98 billion. This strengthened capital base improves the company’s financial stability, leverage profile, and future growth prospects.

Reflecting on these achievements, Okpala emphasized the group’s commitment to long-term sustainability, innovation, and financial resilience. He noted that the company has implemented significant measures to reinforce governance, expand its investment reach, and leverage digital transformation to optimize operations.

“We remain focused on strengthening our financial base while enhancing our digital capabilities. The results achieved this year are a reflection of our commitment to building a sustainable and resilient financial ecosystem that delivers value to our shareholders and stakeholders,” Okpala said.