Globally, more than 745 million people still live without access to electricity. Alarmingly, nearly 90 million of them reside in Nigeria—positioning the country among the nations with the highest energy access deficits. The repercussions of this deficit are profound: economic stagnation, rising operational costs, limited industrial productivity, and widespread socioeconomic inequality.
Energy poverty is not just a technical challenge in Nigeria; it is a developmental crisis costing the nation over $26 billion annually—an estimated 2 per cent of its Gross Domestic Product (GDP).
Despite being endowed with abundant energy resource, Nigeria’s energy infrastructure remains underdeveloped. Over 40 per cent of the population lacks access to electricity, with rural electrification rates trailing at just 26 per cent. As a result, most Nigerians receive an average of just seven hours of electricity daily from the national grid. Critical sectors such as healthcare and education suffer the brunt of this shortfall, with only 40 per cent of functional primary healthcare centers having reliable power access, risking lives and limiting services.
To bridge this energy gap, many Nigerians have turned to alternative sources, like fossil fuel-based generators, which worsen the impacts of climate change. In response, the Federal Government introduced Vision 30:30:30—an ambitious plan to generate 30 GW of electricity by 2030, with renewables accounting for 30 per cent of that mix.
The first legislative summit on renewable Energy in Nigeria was convened by the House of Representatives and UNDP in response to recent transformative legal and policy reforms in the energy sector. Central to this is the fifth amendment to the 1999 Constitution, the Electricity Act 2023 and the National Integrated Electricity Policy 2025 offering a guiding framework for state-level energy systems, the summit aimed to align legislative action with these reforms and explore renewable energy as a key driver for electrification in under-served communities.
Central to the discourse was one key question: Does Nigeria need a single, unified Renewable Energy Law? While the question remains under deliberation, the arguments on both sides are clear and compelling. However, the situation birthed a dilemma on whether to amend or enact. Opponents of a new, standalone Renewable Energy Law argue that Nigeria’s existing legislative landscape is sufficiently robust to accommodate renewable development.
Chief among their references is the Industrial Development (Income Tax Relief) Act of 1971, which provides key incentives—such as the Pioneer Status Incentive—to companies engaged in power generation, transmission, and distribution, including renewable energy enterprises. This provision currently grants a three-year tax holiday, with a possible extension of one to two years.
Rather than drafting an entirely new statute, critics advocate for targeted amendments to this existing law. Specifically, they propose extending the Pioneer Status tax exemption to eight to ten years, giving renewable energy companies adequate time to achieve investment recovery and scalability.
Proponents, however, contend that Nigeria’s patchwork of renewable energy policies has led to confusion, inefficiency, and missed opportunities. A unified legal framework would codify and streamline fragmented provisions, eliminate possible contradictions, and offer clear direction and accountability.
From a legal and policy perspective, Nigeria’s current renewable energy regime suffers from fragmentation. Since 2001, successive governments have developed a multitude of frameworks and strategies, each with its own focus, timeline, and implementation challenges. They include: Nigeria Electric Power Policy 2001, National Energy Policy 2003, Renewable Energy Masterplan 2005, Renewable Energy Policy Guidelines 2006, National Renewable Energy and Energy Efficiency Policy 2013, National Energy Masterplan 2014 amongst others.
Nigeria’s renewable energy sector is currently governed by multiple frameworks. While these instruments signal progress, they also present significant challenges: fragmentation, confusion and a lack of institutional accountability. A unified Renewable Energy Law would give life and streamline existing policy recommendations.
Learnings from International experience reinforces the efficacy of legislative clarity in driving renewable energy transformation. Egypt, for example, achieved 100 per cent electrification by 2016, underpinned by a robust legal architecture—most notably the Renewable Energy Law No. 203/2014.
Kenya offers another compelling model. Its Energy Act, 2019 serves as the central legal framework for the country’s energy transition. The Energy Act, 2019 is Kenya’s primary legal framework for energy regulation, with a strong focus on advancing renewable energy.
While legislation alone cannot solve all the sector’s challenges, it can serve as a foundation for coordinated action. Nigeria’s challenge is not lack of policy or legislation, but the persistent gap in implementation.
Despite the existence of multiple frameworks, execution remains weak, undermining the sector’s growth potential. For instance, Section 3 of the Electricity Act 2023 mandates the Federal Ministry of Power to initiate the development of the National Integrated Electricity Policy and Strategic Implementation Plan within one year of the Act’s passage. This clear legal directive, backed by a specific timeline, facilitated the delivery of the National Electricity Policy 2025—a demonstration of how statutory clarity can drive results.
Conversely, Section 166 of the Electricity Act, which tasks the Federal Ministry of Finance with introducing tax incentives for renewable energy, lacks specificity and enforceable timelines, thereby weakening its impact. This highlights the importance of legislative language that conveys not only intent but also urgency and accountability.
A single Renewable Energy Law would not be a silver bullet, but it would be a critical enabler. To ensure the law’s success, the law should: Harmonise all existing frameworks and incentives under a single legislative structure; Codify incentives (tax holidays, soft loans, duty waivers) and establish mechanisms for their enforcement; Assign clear duties and deadlines to government agencies; Introduce innovative incentives like Renewable Energy Fuel Obligation, Net metering, Smart export guarantee etc.; Introduce enforceable deadlines for implementation; Clearly define roles and responsibilities across federal and state actors; Mandate monitoring and evaluation mechanisms; Enhance existing incentives such as the Pioneer Status Incentive to promote private sector investment through regulatory clarity.
A dedicated Renewable Energy Law, grounded in global best practices and tailored to Nigeria’s context, is not just desirable—it is essential.
Nnenne is a legal and policy consultant with a focus on energy and sustainable development in Africa. He can be reached via: [email protected]
