The Federal Government has launched the Renewable Asset Management Company (RAMCO) to manage, maintain and ensure the long-term sustainability of publicly funded renewable energy assets.
Gatekeepers News reports that RAMCO was launched on Wednesday by Abubakar Aliyu, managing director of the Rural Electrification Agency (REA).
Speaking at the launch, Aliyu said an assessment of seven solar hybrid power projects deployed under the first phase of the Energising Education Programme found that only three were in good or usable condition.
He said the deterioration of some of the projects was not caused by engineering failures but by the absence of adequate systems to maintain 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.”
Aliyu said the REA had deployed 82 megawatts (MW) of solar hybrid generation across 22 federal universities and three teaching hospitals since 2017 through the Energising Education Programme.
He added that another 150MW was 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 Ministry of Education.
According to him, the assessment of existing projects exposed 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.
Aliyu said the gaps informed the establishment of RAMCO, which he described as the agency’s “institutional answer” to the problem.
He said the company would reduce reliance on repeated government appropriations for the maintenance and renewal of publicly funded renewable energy projects.
“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.”
Beneficiary institutions to pay for electricity
Aliyu said beneficiary institutions, including universities and teaching hospitals, would be expected 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 institution must contribute to sustaining them by paying for the electricity they consume,” he said.
He said the proposed tariff should not be viewed as an additional burden on the institutions, arguing that beneficiaries would otherwise continue to spend money on diesel or 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.”
He added that RAMCO was not designed to extract profit from public institutions or become another avenue for treasury funding.
“The tariff, therefore, should reflect what is required to operate, maintain, renew the system over its economic life,” he said.
Aliyu said the platform was intended to reduce reliance on repeated government appropriations by creating a commercially sustainable structure capable of attracting private capital.
He said the REA would conclude the valuation and technical assessment of existing assets and work with the Ministry of Finance Incorporated (MOFI), InfraCorp and the Ministry of Finance to transfer the assets from REA’s books to RAMCO’s balance sheet.
The agency will also complete the onboarding of long-term operation 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,” Aliyu said.
‘RAMCO must break the cycle’
Aliyu said the new model was designed to prevent the government from repeatedly spending money 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 RAMCO was established 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.”
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.
