The Minister of Power, Adebayo Adelabu, has underscored the urgency for Nigeria to transition away from electricity subsidies towards a more sustainable tariff model. Addressing the media at a press conference in Abuja on Wednesday, Adelabu highlighted the nation’s mounting debt obligations to generating companies (GenCos) and gas suppliers, amounting to 1.3 trillion naira and 1.3 billion dollars, respectively.
Adelabu disclosed that while only 450 billion naira was earmarked for subsidy in the current year’s budget, the ministry requires over 2 trillion naira to sustain subsidy payments. In light of this fiscal challenge, the minister advocated for a cost-effective tariff structure to ensure financial viability in the power sector.
In a bid to decentralize power generation and distribution, Adelabu announced a pivotal policy change allowing state governments to independently generate power to supply their states. This move is poised to enhance energy autonomy and address localized electricity needs more efficiently.
Addressing recent grid collapses, Adelabu attributed the recurring incidents to multiple factors, including gas shortages, aging infrastructure, limited capacity for power evacuation, and infrastructure damage in the North-East geopolitical zone. He underscored the need for comprehensive infrastructure upgrades and maintenance to mitigate grid vulnerabilities.
Highlighting challenges faced by the Transmission Company of Nigeria (TCN), Adelabu revealed over 100 abandoned projects due to contract variations stemming from forex fluctuations. Consequently, the TCN will prioritize the completion of existing projects before embarking on new ventures.
Looking ahead, Adelabu announced a significant allocation of over 50 billion naira in the 2024 budget to establish mini-grids, targeting remote areas with limited access to electricity. This initiative aims to expand electricity coverage and improve energy access in underserved communities.
Asserting regulatory oversight, the minister issued a stern warning to electricity distribution companies (DisCos), cautioning that non-compliance with industry standards would result in the revocation of licenses.
In a bid to enhance security for power infrastructure, Adelabu disclosed collaboration efforts with the National Security Adviser, Nuhu Ribadu, to safeguard critical energy assets across the country.
