Power Minister: FG Cannot Maintain Electricity Subsidies

With 1.3 trillion naira in debt to generating companies (GenCos) and 1.3 billion dollars in debt to gas companies, Nigeria cannot continue to subsidise electricity, according to Minister of Power Adebayo Adelabu. The country must instead start moving towards a cost-effective tariff model.

While the ministry requires more than 2 trillion naira for subsidies, Adelabu said during a news conference in Abuja on Wednesday that only 450 billion naira has been allocated for this year.

In his speech, he announced that the states would soon be able to generate their own electricity.

He blamed a lack of gas, ageing equipment in the grid value chain, an inadequate ability to evacuate produced power, and the destruction of power stations in certain areas of the country’s northeast geopolitical zone for the six grid collapses that have occurred since December 2023.

According to him, the Transmission business of Nigeria has more than a hundred unfinished projects that have sprung up because of changes in contract amounts caused by changes in the value of the currency. Until these projects are finished, the business will not grant any new contracts.

According to the minister, more than 50 billion naira will be set out in the 2024 budget for the purpose of constructing mini-grids that will provide electricity to outlying regions.

He threatened to revoke the licence of anyone found wanting unless power distribution firms (DisCos) sat up.

In order to ensure the safety of the electricity infrastructure, the minister further mentioned that he had contacted Nuhu Ribadu, the national security adviser.