The federal government claims to have paid N205 billion of the N1.3 trillion debt owing to generation firms (GenCos) to increase power sector liquidity.
Adebayo Adelabu, Minister of Power, spoke during an oversight visit by the House of Representatives Committee on Power.
On February 15, Adelabu, pushing for the end of electricity subsidies, stated that Nigeria owed N3 trillion to power-producing and gas businesses.
On May 16, the minister said that President Bola Tinubu had approved the gradual settlement of the companies’ debt.
During the visit, Adelabu stated that the federal government is gradually repaying its liability.
He said:
“In terms of markets and liquidity, government is also owing these companies, but they have started paying them little by little.”
“Just about three weeks ago, out of the about N1.3 trillion we are owing the generation companies (GenCos), we were able to pay them N205 billion.
“But I will plead with the members of the house committee to help us mount pressure on the executive to continue to pay these people.”
Adelabu stated that given the current economic hardship, especially fuel scarcity, Nigerians should not be exposed to another national blackout, which would further reduce their quality of life.
He stated that Nigeria must update its power sector infrastructure and reform its existing tariff policy, emphasising that all areas of the power industry require significant reforms.
He said:
“A lot of the towers are falling. The substations are dilapidated with very old transformers, some of them were installed in the 60s. We have not been able to replace them.”
“The same thing with distribution infrastructure. The substations at the distribution level are also not working properly.”
Adelabu called the metering gap as severe, pointing out that only roughly five million of the country’s 12 million power users had been metered, leaving a gap of more than seven million meters.
He stated that the ministry’s mandate is to install two million meters annually over the next five years.
The minister stated that the power sector, which had been regarded stagnant for the previous 15 years, is now making a strong recovery.