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At a recent press conference in Abuja, Nigeria’s Minister of Power, Adebayo Adelabu, highlighted the urgent need for the country to adopt a cost-effective tariff model.
Adelabu revealed that Nigeria currently faces significant debts amounting to N1.3tn owed to electricity generating companies, and $1.3bn owed to gas companies.
During the press conference, Adelabu emphasized that the allocated budget for electricity subsidy in the 2024 budget is only N450bn.
However, findings from the Nigerian Electricity Regulatory Commission indicate that the subsidy is projected to reach approximately N2.9tn this year.
This staggering difference underscores the financial challenges faced by the power sector in Nigeria.
The minister also shed light on the complexities within the power sector, noting that the national grid has experienced six instances of collapse between December 2023 and the present.
These collapses have been attributed to a combination of factors, including gas shortages, aging machinery within the grid value chain, limited capacity to evacuate generated power, and the destruction of power stations in certain parts of the North-East geopolitical zone.
