The Nigerian government, led by President Bola Tinubu, has announced its intention to discontinue subsidizing electricity, a move that could significantly impact the country’s energy landscape.
The Minister of Power, Adebayo Adelabu, made this revelation during a press conference in Abuja on Wednesday, February 14.
Adelabu explained that Nigeria cannot continue to subsidize electricity, and the nation must transition to a cost-effective tariff model.
The country is currently indebted to generating companies (GenCos) to the tune of 1.3 trillion naira and owes gas companies 1.3 billion dollars.
The minister noted that only 450 billion naira was budgeted for subsidy this year, but the ministry requires over 2 trillion naira for subsidy.
State governments will now be allowed to generate power independently to supply power to their states.
The minister also addressed the grid collapse that has occurred about six times between December 2023 and now, attributing it to shortages of gas, aging machines in the grid value chain, low capacity to evacuate generated power, and destruction of power stations in some parts of the North-East geopolitical zone of the country.
The Transmission Company of Nigeria (TCN) has over 100 abandoned projects due to variations on contract figures as a result of forex fluctuations, and the company will not award any new contracts until all such projects are completed.
The minister also mentioned that over 50 billion naira has been earmarked in the 2024 budget to build mini-grids to supply power to remote areas.
Adelabu warned electricity distribution companies (DisCos) to sit up, threatening to withdraw their licenses if they fail to perform.
The minister also reached out to the National Security Adviser, Nuhu Ribadu, to help provide security for power infrastructure.
