The Minister of Power, Adebayo Adelabu, has disclosed that the Federal Government owes electricity generation companies and electricity distribution companies over N4 trillion in electricity subsidies.
Speaking at the ongoing public presentation of the National Integrated Electricity Policy and Nigeria Integrated Resource Plan on Thursday in Abuja, Adelabu said the debt hinders the power sector from delivering optimum service to consumers.
Giving a breakdown, the minister said N2 trillion is owed to GenCos as legacy debt, while another N1.9 trillion is owed to them as part of electricity subsidy for 2024, while DisCos are owed N450 billion for 2024 electricity subsidy.
He said, “How do you expect the GenCos to perform optimally? How do you expect them to pay for gas, service and maintain their turbines and other infrastructure as well as pay their staff if a total of N4 trillion is being owed to them?
“I do not deceive myself. The government cannot afford to continue to fund the level of subsidy that our consumption pattern is throwing up because we have seen increasing consumption of electricity.
The Minister of Power, Adebayo Adelabu, has disclosed that the Federal Government owes electricity generation companies and electricity distribution companies over N4 trillion in electricity subsidies.
Speaking at the ongoing public presentation of the National Integrated Electricity Policy and Nigeria Integrated Resource Plan on Thursday in Abuja, Adelabu said the debt hinders the power sector from delivering optimum service to consumers.
Giving a breakdown, the minister said N2 trillion is owed to GenCos as legacy debt, while another N1.9 trillion is owed to them as part of electricity subsidy for 2024, while DisCos are owed N450 billion for 2024 electricity subsidy.
He said, “How do you expect the GenCos to perform optimally? How do you expect them to pay for gas, service and maintain their turbines and other infrastructure as well as pay their staff if a total of N4 trillion is being owed to them?
“I do not deceive myself. The government cannot afford to continue to fund the level of subsidy that our consumption pattern is throwing up because we have seen increasing consumption of electricity.
“The key issues are the market, liquidity, and sector reforms. We’ll continue to focus on that. We’ll look at the tariff again. I am not saying that we’re going to increase the tariff but to look at the tariff and see how we can improve upon our modest achievement of last year.”
According to the minister, the government would not be able to continue the model of electricity subsidy payment, adding that a new model of intervention is on the way by identifying a segment of the population in need.
He also lamented the lack of investment in the distribution networks of DisCos, saying the government has not seen the migration of more customers to Band A as it anticipated.
