FG OWES GENCOs, DISCOs N4TRN, SAYS MINISTER

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Adebayo Adelabu, the Minister of Power, revealed that the Federal Government owes more over N4 trillion in electricity subsidies to electricity distribution and producing businesses.

Speaking Thursday in Abuja at the National Integrated Electricity Policy and Nigeria Integrated Resource Plan public presentation, Adelabu claimed that the debt prevents the power industry from providing customers with the best possible service.

According to the minister’s analysis, GenCos owe N2 trillion in legacy debt, while DisCos owe N450 billion in 2024 power subsidies. GenCos also owe N1.9 trillion in 2024 electricity subsidies.

He said, “How do you expect the GenCos to perform optimally? How do you expect them to pay for gas, service and maintain their turbines and other infrastructure as well as pay their staff if a total of N4 trillion is being owed to them?

“I do not deceive myself. The government cannot afford to continue to fund the level of subsidy that our consumption pattern is throwing up because we have seen increasing consumption of electricity.

“The key issues are the market, liquidity, and sector reforms. We’ll continue to focus on that. We’ll look at the tariff again. I am not saying that we’re going to increase the tariff but to look at the tariff and see how we can improve upon our modest achievement of last year.”

The minister stated that the government would not be able to continue with the power subsidy payment mechanism and that a new intervention model that identifies a population segment in need is in the works.

He also bemoaned the underfunding of DisCo distribution networks, claiming that the government has not witnessed the increase in Band A customer migration that it had expected.

The minister claimed that DisCos’ lack of investment is the reason why customers aren’t migrating.