In a bid to address the persistent power outages plaguing Nigeria, President Bola Tinubu has sanctioned the gradual payment of power sector debts estimated at over N3.3 trillion.
This significant move aims to alleviate the challenges facing the power sector and improve electricity generation and distribution across the country.
As part of the approved measures, approximately N1.3 trillion owed to power-generating companies (Gencos) by the Federal Government will be settled through cash injections and promissory notes.
Additionally, about $1.3 billion (equivalent to N1.994 trillion) owed to gas companies will be repaid through cash payments and future royalties.
Minister of Power, Chief Adebayo Adelabu, made this disclosure during the 8th Africa Energy Marketplace held in Abuja on Thursday.
He emphasized the government’s commitment to addressing the longstanding issue of power sector indebtedness and ensuring the sustainability of electricity supply in the country.
Adelabu outlined the payment modalities, stating that Tinubu directed the immediate disbursement of N130 billion from the Gas Stabilisation Fund to settle part of the debt owed to Gencos.
The remaining amount will be paid over time, with arrangements made for future payments through guaranteed debt instruments, particularly promissory notes.
Highlighting the significance of these payments, Adelabu underscored their role in incentivizing power-generating companies to invest further in generation capacity, thereby boosting electricity output and meeting growing demand both domestically and across borders.
The minister also addressed concerns about the recent tariff adjustment in Band A, reassuring Nigerians that only 15% of the population is affected.
He emphasized the importance of proper billing in achieving the objectives of the power sector reform agenda.
Furthermore, Adelabu revealed a notable achievement in power generation, with the Nigerian Electricity Supply Industry reaching a new milestone of 5,000 megawatts, partly attributed to the successful operation of the Zungeru hydroelectric power plant.
Meanwhile, the African Development Bank (AfDB) is set to seek board approval for a $1 billion policy-based operation to support the reforms initiated by the new Electricity Act of 2023.
This funding aims to bolster the outcomes expected from the National Integrated Electricity Policy and Strategic Implementation Plan and attract sustainable investments in the sector.
Speaking at the Africa Energy Marketplace, AfDB Vice President Dr. Kevin K. Kariuki emphasized the bank’s commitment to supporting Nigeria’s power sector reforms through policy support, infrastructure financing, and capacity-building initiatives.
He called for collaborative efforts among governments, the private sector, and partners to drive policy recommendations that will lead to universal access to electricity by 2030 and zero carbon emissions by 2060.
In a related development, former Minister of Power Barth Nnaji and Labour Party presidential candidate Peter Obi urged the Federal Government to declare an emergency in the power sector.
They emphasized the need for urgent action to address the challenges hindering the sector’s progress and ensure sustainable energy access for all Nigerians.
The inaugural Dele Momodu Leadership Lecture provided a platform for stakeholders to deliberate on critical issues affecting the power sector and explore viable solutions to enhance electricity generation, distribution, and affordability in Nigeria.
