The Minister of Power, Adebayo Adelabu, emphasized that Nigeria must transition away from subsidizing electricity towards adopting a cost-reflective tariff model due to the substantial debts the country has accumulated. Nigeria owes generating companies (GenCos) approximately 1.3 trillion naira and gas companies around 1.3 billion dollars. During a press conference in Abuja on Wednesday, Adelabu highlighted the financial strain on the sector, noting that although only 450 billion naira was allocated for subsidies this year, the actual requirement exceeds 2 trillion naira.
Adelabu announced that state governments would be permitted to independently generate and supply electricity within their regions, signaling a move to decentralize power generation in the country.
Addressing the issue of the national grid’s instability, which has experienced multiple collapses since December 2023, the minister attributed the failures to a combination of factors. These include gas supply shortages, ageing infrastructure within the grid, inadequate capacity for evacuating generated power, and damages to power stations, particularly in the North-East geopolitical zone, due to security challenges.
He also disclosed that the Transmission Company of Nigeria faces difficulties in completing over 100 ongoing projects, primarily due to contract price variations caused by foreign exchange rate fluctuations. As a result, no new contracts will be awarded until the existing projects are finalized.
To enhance electricity access in remote areas, Adelabu mentioned that over 50 billion naira has been allocated in the 2024 budget for the development of mini-grids.
Furthermore, the minister warned electricity distribution companies (DisCos) about the necessity of improving their services. He stated that any company failing to meet expectations risks having its license revoked.
In efforts to secure the nation’s power infrastructure, Adelabu revealed that he has engaged with the National Security Adviser, Nuhu Ribadu, to provide necessary security measures.