Nigeria: REA Launches Company To Manage Publicly Funded Renewable Energy Assets

Nigeria has established the Renewable Asset Management Company (RAMCO) to manage and sustain publicly funded renewable energy assets, the Rural Electrification Agency (REA) said on Wednesday.

The company was launched by Abubakar Aliyu, managing director of the REA, which oversees Nigeria’s rural electrification programmes.

Aliyu said an assessment of seven solar hybrid power projects deployed under the first phase of the agency’s Energising Education Programme found that only three were in good or usable condition.

The deterioration was not caused by engineering failures but by inadequate systems for maintaining the assets after commissioning, he said.

“Of the seven, only three were in good or usable condition,” Aliyu said. “Not because of engineering failure, but because we had not adequately institutionalised what happens after the commissioning of the project.”

Since 2017, the REA has deployed 82 megawatts (MW) of solar hybrid generation capacity across 22 federal universities and three teaching hospitals through the Energising Education Programme, Aliyu said.

Another 150 MW is either under construction or in the pipeline through the Distributed Access through Renewable Energy Scale-Up (DARES) programme, the National Public Sector Solarisation Initiative and a project being implemented by the Tertiary Education Trust Fund (TETFund) under the education ministry, he said.

The assessment identified gaps in maintenance, revenue collection and asset management, Aliyu said.

“There was no sustainable maintenance regime, no dependable revenue mechanism, and critically, no institution whose primary responsibility was to preserve those assets throughout their economic lives,” he said.

Those gaps led to the creation of RAMCO, which Aliyu described as the REA’s institutional response to the problem.

RAMCO is intended to reduce reliance on repeated government appropriations to maintain and renew publicly funded renewable energy projects, he said.

“RAMCO is certainly not another request for treasury funding. Its purpose is precisely the opposite,” Aliyu said. “To move the long-term sustainability burden away from repeated public appropriation and onto a commercially sustainable platform capable over time of attracting private capital.”

The company will manage publicly financed renewable energy assets, contract operators, meter electricity consumption, collect revenue and set aside funds to replace components when they reach the end of their useful lives, Aliyu said.

“If a battery or inverter requires replacement in year 8, we should not return to the Ministry of Finance, and we should be able to have an economic value to replace that battery or inverter,” he said. “The money should already be there, and the planning has to start today.”

Aliyu said RAMCO was not intended to extract profit from public institutions or become another channel for treasury funding.

“The tariff, therefore, should reflect what is required to operate, maintain, renew the system over its economic life,” he said.

Lazarus Angbazo, chief executive officer of Infrastructure Corporation of Nigeria (InfraCorp), said RAMCO was created to address the challenge of maintaining infrastructure after commissioning.

“What happens to an infrastructure project after the commissioning ceremony is over?” Angbazo asked.

“We spend enormous amounts of time, effort, and capital designing, financing, and building the infrastructure. We celebrate going to commission, but the real economic life of that asset is only beginning at the point of commissioning.”

Professionally managed renewable energy assets could also create opportunities for private-sector participation in operations and maintenance, equipment manufacturing, metering, digital monitoring, insurance and financing, Angbazo said.