The Federal Government has announced the payment of N205 billion to Generation Companies (Gencos) as part of its ongoing efforts to address the longstanding debt crisis in the industry.
This payment is part of a broader N1.3 trillion owed to these companies.
The announcement was made by the Minister of Power, Adebayo Adelabu, during an oversight visit to the House of Representatives in Abuja on Monday.
Adelabu’s update comes as part of the government’s strategy to improve liquidity within the power sector and mitigate the financial challenges faced by power producers.
Debt Relief and Sector Impact
Adelabu said the payment of N205 billion is crucial to settling the massive debt burden that has been hampering the efficiency and sustainability of Nigeria’s power sector.
He further stated that the recent improvement in electricity supply across the country is not merely a seasonal benefit but a result of targeted government interventions.
“This payment is a significant relief to the Gencos, who have long been struggling with financial constraints due to the outstanding debts. It represents our commitment to stabilizing the power sector and ensuring a reliable supply of electricity for Nigerians,” Adelabu stated.
Infrastructure and Tariff Policy Reforms
The Minister also addressed the broader issues affecting the power sector, including outdated infrastructure and the urgent need for tariff policy reforms.
He noted that many of the sector’s towers and substations are in a state of disrepair, with some transformers dating back to the 1960s.
“Our power infrastructure is in dire need of modernization. Many of our distribution facilities are outdated and ineffective. We must invest in upgrading these assets to avoid potential blackouts and further strain on our power supply,” Adelabu warned.
Metering Gap and Siemens Project
The metering gap remains a significant concern, with only slightly more than five million out of over 12 million electricity customers nationwide currently metered.
Adelabu outlined the ministry’s ambitious plan to install two million meters annually over the next five years to bridge this gap.
He also provided an update on the Siemens power project, describing the pilot phase as nearing completion.
The project, a key part of the federal government’s strategy to enhance power infrastructure, involves the installation of power transformers and mobile substations across the country.
“Through our collaboration with Siemens, we are making tangible progress in modernizing our power infrastructure. The improvements you see today are a direct result of these efforts and not merely a consequence of seasonal rainfall,” Adelabu asserted.
Call for Continued Support
Adelabu concluded his address by urging lawmakers to continue pressing the executive branch to ensure ongoing payments and support for the power sector.
He acknowledged that while the N205 billion payment is a step in the right direction, continued financial support and sector reforms are essential for achieving long-term stability and efficiency.
“The journey to a fully functional and reliable power sector is ongoing. We need sustained efforts and support from all stakeholders to ensure that our objectives are met and that we provide uninterrupted electricity to all Nigerians,” Adelabu emphasized.
The federal government’s latest move is seen as a critical intervention in addressing the systemic issues plaguing Nigeria’s power sector and ensuring a more stable and reliable electricity supply for the country’s citizens.
Leave a Comment