The Minister of Power, Adebayo Adelabu, says Nigeria cannot sustain electricity subsidies. He asserts that the nation must transition towards a tariff structure that reflects actual costs, given Nigeria’s significant debt of 1.3 trillion naira to generating companies (GenCos) and 1.3 billion dollars owed to gas companies.
Adelabu, speaking at a press conference in Abuja on Wednesday, disclosed that only 450 billion naira was allocated for subsidy this year, whereas the ministry requires over 2 trillion naira for subsidy.
He announced that state governments will now have the authorization to independently generate power to supply their respective states.
Regarding the frequent grid collapses, which occurred approximately six times between December 2023 and the present, Adelabu attributed these incidents to factors such as gas shortages, aging equipment within the grid infrastructure, limited capacity for power evacuation, and damage to power stations in certain areas of the North-East geopolitical zone.
He highlighted that the Transmission Company of Nigeria has more than 100 abandoned projects due to contract variations caused by fluctuations in foreign exchange rates. Consequently, the company will refrain from awarding any new contracts until all such projects are completed.
The minister added that the 2024 budget has over 50 billion naira set aside for the construction of small grids that will provide electricity to isolated locations.
Electricity distribution corporations (DisCos), according to him, had to stand up or risk having their licenses revoked.
The minister added that in an effort to help secure the electrical infrastructure, he has been in touch with Nuhu Ribadu, the national security adviser.