The Rural Electrification Agency (REA) has launched the Renewable Asset Management Company (RAMCO) to manage and sustain publicly funded renewable energy assets in universities and teaching hospitals across the country, amid concerns over the deterioration of projects after commissioning.

The Managing Director of REA, Abba Aliyu, disclosed this on Wednesday in Abuja at the official launch of RAMCO, saying the initiative was established to address the persistent challenge of maintaining renewable energy infrastructure after delivery.

Aliyu said REA had deployed 82 megawatts of solar hybrid generation across 22 federal universities and three teaching hospitals since 2017 under its Energising Education Programme.
He, however, disclosed that an assessment of seven projects delivered under the first phase showed that only three remained in good or usable condition.

“At one institution, the required special purpose vehicle had been established, but no single revenue is collected from the sale of the electricity being generated by that infrastructure,” he said.

The REA boss said the deterioration was not due to engineering failure but the absence of sustainable maintenance arrangements, dependable revenue mechanisms and an institution responsible for preserving the assets throughout their economic lives.

He said RAMCO would serve as the agency’s institutional response to the challenge by professionally managing publicly financed renewable energy assets, contracting competent operators, metering, billing and collecting payments, as well as maintaining the equipment.
The initiative was launched in collaboration with the Ministry of Power, Ministry of Education, Ministry of Health and Social Welfare, Ministry of Finance, Ministry of Finance Incorporated, Budget Office of the Federation and Infrastructure Corporation of Nigeria.

“RAMCO’s mandate is straightforward: manage publicly financed renewable energy assets professionally; contract competent operators; meter, bill and collect; maintain sustainability of all this equipment,” Aliyu stated.

He said the company would also establish a funding mechanism for replacing components such as batteries and inverters when they reach the end of their useful lives.

“If a battery or inverter requires replacement, we shouldn’t return to the Ministry of Finance. We should be able to have an economic fund to replace that battery or inverter. The money should already be there, and the deployment has to start today,” he said.

Aliyu stressed that RAMCO was not designed to make profits from institutions where the government had already funded the capital assets, but to ensure that tariffs covered the cost of operating, maintaining and renewing the systems.

He said beneficiary institutions would have to contribute to sustaining the projects by paying for the electricity they consumed.

“The government has funded this asset, REA has built them, but the beneficiary institution must contribute to sustaining them by paying for the electricity they consume,” he said.
Giving an example, Aliyu said the solar plant at Alex Ekwueme Federal University, Ebonyi, commissioned in 2019, serves more than 9,500 staff and students.

He said the plant generated about N1.8 billion in combined savings from avoided diesel purchases and electricity bills in its first five years, while preventing about 2,367 tonnes of carbon emissions.

“So as a sustainability… this is a sustainability tariff. It’s not simply a new exposure or burden on the universities. It is just a simple redirection of the part of what that institution would otherwise spend on expensive diesel or pay for electricity,” he said.

Aliyu said the model would reduce reliance on repeated government appropriations for renewable energy infrastructure while creating a platform capable of attracting private capital.

He added that professionally managed renewable energy assets with predictable revenues could eventually be aggregated and financed to support further electrification projects.
The REA boss also disclosed that the agency was partnering with the Ministry of Finance Incorporated and InfraCo to support local manufacturing of solar modules, batteries, inverters, street lighting equipment and solar asset recycling.

He said $425 million had been invested in the manufacturing cycle as of last year.
Aliyu said REA would conclude the valuation and technical assessment of existing assets, transfer them to the RAMCO partnership and establish operation and maintenance arrangements for projects under the Energising Education Programme.

He added that the agency would engage beneficiary institutions, the National Universities Commission, Ministries of Education and Health and the Budget Office to establish accountable tariff and payment arrangements.

Meanwhile, the Chairman of the Ministry of Finance Incorporated, who also spoke at the event, backed the initiative, recalling that several Federal Government projects had previously been abandoned after completion because of poor maintenance.

He said MoFI had developed a national asset register of Federal Government projects that had been checked, verified and evaluated.
He urged the Federal Government to ensure that universities were properly carried along in the RAMCO initiative to ensure effective tariff payment.