The Minister of Power, Adebayo Adelabu, has disclosed that the Federal Government is working to transition Nigeria’s electricity sector to a cost-reflective tariff regime in a bid to halt the mounting N4 trillion debt owed to power generation companies.
Speaking at the Mission 300 Stakeholders Engagement meeting held in Abuja, Adelabu said the move is part of broader reforms aimed at restoring sustainability and bankability to the power sector.
“Currently, there’s a huge outstanding debt to the Power Generation companies in the form of unpaid government subsidies which stands at about N4trn as of December 2024,” the minister said.
“The Federal Government is already working out modalities to defray this obligation and to ensure that further obligations are not accrued going forward, the government is working on a plan to transition the sector to a fully cost-reflective regime while implementing targeted subsidies for the economically vulnerable citizens in the country.”
Despite the recent increase in electricity tariff for Band A customers, many consumers have continued to decry low power supply and faulty installations.
However, Adelabu maintained that the government’s decision was necessary for national economic growth and development.
In a statement issued by his media aide, Bolaji Tunji, the minister outlined key priorities under the government’s power reform agenda.
These include recovering idle generation capacities, expanding the country’s energy mix to enhance energy security, and integrating cheaper, cleaner energy sources into the national grid.
Adelabu also listed other focus areas such as resolving market liquidity challenges, expanding transmission infrastructure, and stabilising the national grid to prevent recurring grid disturbances and collapses.
He noted that the ministry is also prioritising rural electrification and energy transition initiatives, aimed at increasing access to reliable power in unserved and underserved communities through renewable energy deployment.
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According to him, the stakeholders’ meeting provided a platform for aligning strategies and fostering partnerships needed to convert the Nigeria Energy Compact into tangible outcomes.
He called on development partners, the private sector, philanthropic organisations, civil society groups, and public sector institutions to support the initiative.
Also speaking at the event via Zoom from Brazil, Minister of Finance, Chief Wale Edun, stressed the importance of the ongoing power sector reforms, describing them as vital to unlocking Nigeria’s economic potential and driving job creation.
He added that the reforms had already led to more than a 40 percent increase in power distribution in the first quarter of 2025.
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