REA moves to unlock small hydropower potential and scale renewable financing

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Key Points

• The Rural Electrification Agency (REA) is pivoting toward small hydropower to expand electricity access, targeting dormant water assets for conversion into viable energy solutions.
• Priority sites for run-of-river hydropower include Ikeregoch (Oyo), Roma (Nasarawa), and Gare Dam (Kano).
• The agency is collaborating with AP3 Advisory, UK PACT, and the Federal Ministry of Power to bridge the gap between hydrological data and investment-ready projects.
• This follows recent financing signals from the European Investment Bank (€200m) and a $700,000 grant from ECOWAS for solar projects in public institutions.

Main Story

Nigeria is witnessing a strategic shift in its energy transition as the Rural Electrification Agency (REA) moves from theoretical potential to the execution of small hydropower projects.

Dr. Abba Aliyu, Managing Director of the REA, disclosed via X on Friday that the agency is taking deliberate steps to move dormant water assets into scalable energy solutions.

This initiative focuses on “run-of-river” hydropower opportunities, which generate electricity without the need for large, environmentally disruptive dams.

The REA is currently working alongside AP3 Advisory and UK PACT to navigate the technical and financial requirements of these projects.

Pre-feasibility studies have already been presented for several priority locations, including sites in Oyo, Nasarawa, and Kano states.

Aliyu noted that the work involves aligning these projects with the Electricity Act 2023 regulatory landscape while strengthening commercial viability through Public-Private Partnerships (PPP) and blended finance models.

The Issue

The primary challenge for small hydropower in Nigeria has long been the “Execution Gap”—the disconnect between raw hydrological data and the financial structures required to attract private investors. While Nigeria has vast untapped water resources, turning them into “investment-ready” projects requires precise technical detail and a stable regulatory framework. By leveraging the Electricity Act 2023, the REA aims to decentralize power generation, but success hinges on the commercial viability of these mini-grids in underserved communities where the ability to pay for power is often limited.

What’s Being Said

• “There’s a quiet shift happening in how we think about powering Nigeria,” stated Dr. Abba Aliyu, emphasizing a commitment to moving from theory to execution.
• He noted that the agency is “bridging the gap between raw hydrological data and the technical and financial requirements needed to attract investment.”
• Regarding sustainability, Aliyu remarked, “It’s not just about generating power. It’s about building systems that are sustainable, scalable, and inclusive.”
• Stakeholders at a recent engagement workshop in Kano State highlighted the importance of “dormant water assets” as a key to unlocking rural industrialization.

What’s Next

• Following the pre-feasibility stage, the REA and its partners will move toward technical design and financial close for the pilot sites in Oyo, Nasarawa, and Kano.
• The agency is expected to further integrate blended finance models to de-risk these hydropower projects for private sector participation.
• Construction at the Gare Dam (Kano) and other priority sites will likely be monitored as a benchmark for the scalability of the small hydro initiative.
• The REA will continue its broader coordination of the DARES programme and Mission 300, using the recently signaled EIB and ECOWAS funding to complement these hydropower efforts with solar PV rollouts.

Bottom Line

The REA is diversifying Nigeria’s renewable energy portfolio by looking beyond solar to the nation’s river networks. By focusing on technical discipline and investment readiness, the agency is attempting to transform dormant infrastructure into active power hubs, ensuring that the energy transition reaches the furthest corners of the country.