Power Sector And Other Related News Stories For Thursday 15th February 2024

Power Minister Laments as Electricity Subsidy Rises to N3tn

The indebtedness of Nigeria’s power sector to electricity generating companies and gas producers has risen to about N3.3tn, the Federal Government declared on Wednesday.

It also revealed that subsidy on electricity for 2024 would gulp about N3tn, whereas only N450bn was budgeted for this purpose in this year’s budget, adding that it was now very difficult to sustain power subsidy.

Minister of Power, Adebayo Adelabu, said Nigeria must begin to move towards a cost-effective tariff model, as he revealed that the country was currently indebted to the tune of N1.3tn to electricity generating companies, while the debt to gas companies was $1.3bn.

The minister, who spoke at a press conference in Abuja, which also had the heads of all the agencies under the Federal Ministry of Power in attendance, however, insisted that he would not resign his position as power minister following calls for his resignation by some persons.

https://punchng.com/power-minister-laments-as-electricity-subsidy-rises-to-n3tn/

We Can No Longer Continue to Subsidise Electricity – Nigerian Govt

The Minister of Power, Adebayo Adelabu, has declared that the country can no longer continue to subsidise electricity.

According to the minister, Nigeria must begin to move towards a cost-effective tariff model, adding that the country is currently indebted to the tune of 1.3 trillion naira to generating companies (GenCos) and 1.3 billion dollars owed gas companies.

Adelabu said this when he addressed a press conference in Abuja on Wednesday, disclosing that only 450 billion naira was budgeted for subsidy this year.

He said that the ministry needs over two trillion naira to effect subsidy.

The minister said that states will now be allowed to generate power independently.

https://dailypost.ng/2024/02/14/we-can-no-longer-continue-to-subsidise-electricity-nigerian-govt/

FG Technically Announces Removal of Electricity Subsidy

Minister of Power, Adebayo Adelabu, said Nigeria must begin to move towards a cost-effective tariff model, as he revealed that the country was currently indebted to the tune of N1.3tn to electricity generating companies, while the debt to gas companies was $1.3bn.

The minister spoke at a press conference in Abuja, which also had the heads of all the agencies under the Federal Ministry of Power in attendance.

Adelabu stated that only N450bn was budgeted for electricity subsidy in the 2024 budget but stressed that findings by the Nigerian Electricity Regulatory Commission showed that subsidy would gulp about N2.9tn this year.

He noted that the crisis in the power sector had been so complex, stressing that the national grid had collapsed for about six times between December 2023 and now.

https://championnews.com.ng/fg-technically-announces-removal-of-electricity-subsidy/

FG Expresses Concern as Electricity Market Debt Tops N4trn

The Federal Government yesterday expressed concerns over liquidity challenges facing the Nigerian Electricity Supply Industry, NESI, admitting that the debt in the sector has risen to over N4 trillion.

The Minister of Power, Chief Adebayo Adelabu, told journalists in Abuja that resolving the liquidity challenges in the sector was critical to ensuring regular power supply to Nigerians.

He pointed out that with a legacy debt of N2 trillion, N1.3 trillion existing debt owed to generation companies and $1.3 billion gas supply debt, the sector was struggling to survive

He noted that the government will have to decide on how electricity is paid for in the country either through a cost reflective tariff or subsidies.

He highlighted “The persistent liquidity issues coming from inappropriate tariff regime, poor collections and inadequate funding of government subsidies leading to huge debts owed to the transmission, generation and gas supply companies.

“This has restricted investments required for sustaining supply flow, capacity expansion and infrastructural improvements.

https://www.vanguardngr.com/2024/02/fg-expresses-concern-as-electricity-market-debt-tops-n4trn-2/

Naira Depreciation Pushes Electricity Subsidy to N2.9trn — Power Minister

The federal government needed no less than N2.9 trillion to subsidise electricity consumption in 2024 due to the sharp depreciation of the Naira. This is a sharp increase over the earlier projection of N1.6 trillion.

The Minister of Power, Adebayo Adelabu, who revealed this, urged the federal government to either fund the subsidy or allow cost-effective tariff to prevail.

Adelabu, who addressed a press conference in Abuja on Wednesday, said only N450 billion was budgeted for subsidy this year but the ministry needed about N2.9 trillion for subsidy.

He also said the country is currently indebted to the tune of N1.3 trillion to power generating companies (GenCos) and $1.3 billion owed gas companies.

He said state governments will now be allowed to generate power independently to supply power to their states.

On the grid that has collapsed for about six times between December 2023 and now, he said this was caused by shortage of gas, ageing machines in the grid value chain, low capacity to evacuate generated power, and destruction of power stations in some parts of the North-East geopolitical zone of the country.

https://leadership.ng/naira-depreciation-pushes-electricity-subsidy-to-n2-9trn-power-minister/

Over N3trn Required to Stabilize Electricity Supply – FG

Federal Government has said that over N3 trillion is required to ensure stability in the electricity sector.

Chief Adebayo Adelabu, Minister of Power made the disclosure at a press conference to unveil road map to stabilizing the sector in preparation for turn around and transformation.

According to Adelabu, the figure would be used for settlement of existing sectoral outstanding debt obligations to the Gas Supply and Power Generation companies using partly cash payment and guaranteed debt instruments.

He said that N1.3 trillion is current debts to the GenCos and $1.3 billion legacy debts to the GasCos, all amounting to over N3 trillion.

The Minister said there is also need to convene a national discourse on the nation’s perspective to electricity supply, to determine whether it is classified as a commercial product or social service, stressing that there must be an agreement across divides on how we define electricity.

“Depending on the outcome of the above, either implementation of a cost reflective tariff or a cashed backed Federal government guaranteed subsidy funding regime to inject liquidity into the sector.

https://independent.ng/over-n3trn-required-to-stabilize-electricity-supply-fg/

 Electricity Sector Legacy Debts Hit N3trn

Chief Adebayo Adelabu, Minister of Power on Wednesday said the debts owed to power companies have accumulated up to N3 trillion.

The Minister who gave the figure during a press conference in Abuja, said the amount represents the N1.3 trillion debts owed to Generation companies, and about $1.3 billion owed to Gas Companies over the years.

Adelabu, who briefed journalists in company of all the heads of Parastatals in the ministry, described the situation of the power sector as complicated noted that the debts kept piling up because subsidy are not being paid.

He likened the current electricity situation as the dilemma of choosing between the devil and the deep blue sea, by either implementing cost reflective tariffs or government paying the subsidy which runs into billions of Naira.

https://independent.ng/electricity-sector-legacy-debts-hit-n3trn/