FG mentions date to settle 50% of N4 trillion electricity debt, insists on tariff hike again

• The national authorities has yet taken enactment connected the outstanding N4 trillion indebtedness owed to Gencos and Discos
• The curate for powerfulness has outlined plans to wage fractional of the wealth successful currency wrong the adjacent 8 months
• The curate is besides hinting astatine a tariff review, saying that it is nary longer sustainable for the authorities to carnivore 70% of vigor costs

Legit.ng writer Ruth Okwumbu-Imafidon has implicit a decennary of acquisition successful concern reporting crossed integer and mainstream media.

For weeks, powerfulness assemblage conversations person dwelt connected the humongous N4 trillion indebtedness the national authorities owes the energy procreation companies and organisation companies successful Nigeria.

Chairman of Transcorp Energy, Tony Elumelu, had lamented during an capitalist forum past week that the N600 billion owed to the institution had go a dense burden.

Earlier this week, energy generating companies besides threatened to unopen operations arsenic the indebtedness had crippled their operations.

Unless a tariff reappraisal is done, authorities volition proceed to accumulate 70% of the energy costs arsenic debt, the curate argued. Photo credit: State House/Adebayo Adelabu (X)
Source: Twitter

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The national authorities has yet responded to the matter.

FG mentions day to wage 50% of N4 trillion indebtedness to Gencos

The Minister of Power, Adebayo Adelabu, gave a breakdown of the government’s program to wage fractional of the indebtedness earlier the extremity of 2025, according to the PUNCH.

Speaking astatine the sixth variation of the 2025 Ministerial Press Briefing Series connected Thursday successful Abuja, Adelabu said the indebtedness volition beryllium paid successful currency and promissory notes truthful that the Gencos tin support their operations up.

Adelabu noted that discussions are ongoing with the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, to settee the indebtedness done either budgetary allocation oregon guaranteed instruments similar promissory notes.

He explained that with the promissory notes, the Gencos can contiguous them to the slope and get the currency they request to conscionable their fiscal obligations.

FG speaks astir steps to forestall further debt

Speaking further astir the debts, the curate said that a tariff reappraisal is imminent, fixed the rising outgo of generating and supplying energy.

He noted that overmuch of the debts were accumulated from subsidy costs, and it is nary longer sustainable to support astatine it.

Adelabu explained that the mean vigor outgo of 1 kilowatt was N170, but up till past year, 85% of Nigerian customers were paying N60 portion the authorities had to wage the remainder arsenic subsidies.

His words;

“Before now, astir 85% of customers were paying astir N60 per kilowatt-hour, portion the existent outgo of supplying powerfulness was astir N170. Only 15 per cent of customers—mostly Band A—pay N209, and that is wherever determination is simply a tiny margin.”

With the tariff summation for customers connected Band A, the electricity subsidies were reduced by 35%, with an further N700 cardinal raised successful gross successful 2024.

FG hints astatine different tariff review, gives details

The Minister noted that adjacent though Nigerians were not blessed with the past tariff review, it was the lone mode to support the viability of the powerfulness sector, arsenic investors are not keen to put successful a assemblage wherever they are stopped from charging cost-reflective tariffs.

Explaining the tariff review, Adelabu said;

“We’re not eliminating subsidies, but we indispensable restructure them. In the past, subsidies mostly benefited high-consuming households. Now, we’re designing a strategy wherever lone low-consumption users—mostly mediocre households—enjoy the subsidy.“We are not connected the broadside of the companies — we are connected the broadside of Nigerians. But we indispensable besides look the world that energy, similar food, is costly everyplace successful the world.”

The roadworthy to 8,000MW looks precise long, with energy procreation and organisation companies inactive plagued with immense debts. Photo credit: TCN
Source: Twitter

He insisted that fiscal viability could coexist with work transportation successful the powerfulness sector, and promised that the authorities would support beardown oversight.

Adelabu warned that immoderate Disco that failed to supply 20 hours of energy regular to customers connected Band A feeders would beryllium penalized.

Power Minister calls for Electricity tariff increase

In related Legit.ng news, Nigeria's powerfulness assemblage has yet deed the 6,000MW people acceptable by the national government.

This milestone came 3 months aft the earlier acceptable date, and the curate attributed it to liquidity issues successful the powerfulness sector.

He noted that unless an electricity tariff review is done, the powerfulness assemblage would not beryllium capable to execute 7,000MW oregon more.

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Source: Legit.ng