The Federal Government has launched the Renewable Asset Management Company (RAMCO), a new platform designed to ensure the long-term sustainability, efficient management and commercial viability of publicly funded renewable energy assets across Nigeria.

The company was launched on Wednesday by Abubakar Aliyu, Managing Director of the Rural Electrification Agency (REA), who said RAMCO was established to address persistent challenges associated with the maintenance and management of renewable energy projects after commissioning.

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

According to him, the deterioration of some of the projects was not caused by engineering failures but by the absence of an institutionalised system for maintaining the assets after commissioning.

“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.”

He said REA had, since 2017, deployed 82 megawatts (MW) of solar hybrid generation across 22 federal universities and three teaching hospitals under the EEP.

An additional 150MW, he added, 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 TETFund project under the Federal Ministry of Education.

Aliyu said the assessment of existing projects revealed significant gaps in maintenance, revenue collection and asset management.

“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.

ALSO READ:

• FG Launches RAMCO to Sustain Publicly Funded Renewable Energy Assets
• Savannah Energy Completes Uquo South Exploration Well
• Energia Marks 25 Years of Indigenous Energy Growth
• $21bn Investment Target as NNPC, Partners Seal Bonga South-West Deal
• NDPHC Applauds NPA for Recovery of Abandoned Power Equipment at Seaports

He described RAMCO as REA’s “institutional answer” to the challenge, saying the company would reduce dependence on repeated government appropriations for the maintenance, rehabilitation and replacement of publicly funded renewable energy infrastructure.

“RAMCO is certainly not another request for treasury funding. Its purpose is precisely the opposite,” Aliyu said.

The platform, he explained, is intended to shift the long-term sustainability burden from repeated public appropriations to a commercially sustainable structure capable of attracting private capital.

Under the new model, RAMCO will professionally manage publicly financed renewable energy assets, engage competent operators, meter electricity consumption, collect revenues and ensure that sufficient funds are available to replace equipment when it reaches the end of its useful life.

“If a battery or inverter requires replacement in year eight, we should not return to the Ministry of Finance. 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.”

Beneficiary Institutions to Pay for Electricity

Aliyu said beneficiary institutions, including universities and teaching hospitals, would be required to contribute to the sustainability of the projects by paying for the electricity they consume.

“Government has funded this asset. REA has built them. Beneficiary institutions must contribute to sustaining them by paying for the electricity they consume,” he said.

He said the proposed tariff should not be regarded as an additional burden on the institutions, noting that the beneficiaries already spend money on diesel and electricity from other sources.

“Reliable electricity, just as the Minister of Power mentioned, is not free,” Aliyu said.

“The question is whether we pay repeatedly for diesel and fuel infrastructure or we pay a predictable tariff that keeps a cleaner, more reliable system operating for 20 years. That is the RAMCO impact.”

The REA chief executive stressed that RAMCO was not designed to extract excessive profit from public institutions or become another channel for government funding.

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

Aliyu said REA would conclude the valuation and technical assessment of assets already deployed and work with the Ministry of Finance, the Ministry of Finance Incorporated (MOFI) and the Nigeria Sovereign Investment Authority-backed Infrastructure Corporation of Nigeria (InfraCorp) to transfer the assets from REA’s books to RAMCO’s balance sheet.

The agency, he added, would also complete the onboarding of long-term operations and maintenance partners for completed phases of the Energising Education Programme.

“We will report our progress publicly. If we have delivered, Nigerians will know. If we have fallen short, they will know that too,” he said.

Aliyu said the new model was designed to prevent government from repeatedly spending public funds to rebuild infrastructure that had already been delivered.

“A trillion-dollar economy cannot be built on infrastructure that must repeatedly be built and rebuilt again,” he said.

“Every naira spent replacing an asset that we have already built is a naira unavailable to electrify another university, hospital, community, or protected enterprise. RAMCO must break that cycle.”

Lazarus Angbazo, Chief Executive Officer of InfraCorp, said the establishment of RAMCO addressed one of the critical challenges facing infrastructure development: what happens to an asset after commissioning.

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

He said significant resources were invested in designing, financing and constructing infrastructure, but the economic life of an asset only truly begins after commissioning.

Angbazo said 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.

The establishment of RAMCO is therefore expected to introduce a more sustainable lifecycle-management model for publicly funded renewable energy infrastructure while improving asset performance, revenue recovery and long-term electricity supply to beneficiary institutions.