FG Vows To Solve Power Puzzle As Sector Debt Hits N4.6trn

Minister of Power, Adelabu Adebayo.

The Federal Government has expressed determination to address the over 40 years multifaceted challenges bedeviling the Nigerian power sector.

For over 40years, the country’s capacity to generate and successfully transmit electricity is hovering around 4,000 and 5,000 megawatts, even after spending over $12billion in the sector.

This, the Nigerian government blamed on lack of sustaining liquidity and infrastructure funding, as well as structural misalignment.

Apart from restricting investments required for sustaining supply flow, capacity expansion and infrastructure improvements, the challenges have discouraged lending to the sector by financial institutions, making it unattractive to new investors.

The Minister of Power, Chief Adebayo Adelabu who made the vow during a Press Conference on Wednesday in Abuja, disclosed the willingness of the federal government to offset the sector debt.

Chief Adelabu said, the government was ready to settle the existing sectoral outstanding debt obligations to the gas suppliers and power generation companies using partly cash payment and guaranteed debt instruments.

He noted that of the N4.6 trillion sectoral debt, 60% of it is being owed to gas suppliers resulting in the nationwide blackouts currently affecting households, businesses and industries operating in the country.

While N3trillion is owed to gas suppliers and generation companies, N1.6trillion has been earmarked by the federal government as 2024 subsidy payment to the distribution companies.

Painting a gloomy picture of the situation, Adelabu said, out of the N2.9 trillion required for the subsidy payment in the sector, only N450 billion was provided for in the 2024 budget, questioning the sustainability of the subsidy payment.

“There are a lot of competing needs of government in other sectors. Can we fund it? What we have made provision for your budget for 2024 is N450 billion. And we will require N2.9 trillion for subsidy. So can we afford it? We must be realistic. Can we afford it? N450 billion is less than 20% of the almost N3 trillion that is required for subsidy. We must continue at this price. So these are things that we need to consider as a nation.

“If government is pledging subsidy, it must be ready to fund it. There must be federal government guarantee or cashback for this subsidy. Otherwise, we’ll grind the sector to zero”, he noted.

Highlighting some of the ongoing activities to improve power supply in the country, the Minister listed “the recent completion of the 700MW Zungeru Hydro Electricity Power Plant in Niger State,

“Financing the required infrastructure to enable complete evacuation of the 40MW Kashimbila Hydro Power Plant in Taraba State using Promissory Note facility at the Debt Management Office (DMO),

“Resuscitation of Abandoned 26 small and medium size Hydro Plants across the country with Solar Hybridization. This will adopt embedded power model with connectivity to the regional Discos distribution network,

“Completion of the 20MW Wind/Solar hybrid power plant in Katsina State,

“Completion of infrastructure required for complete evacuation of the 30 million Gurara Dam Power Plant,

“Revisitation of the abandoned 15 IPP Solar plants in the Northern part of the country, and developing an IPP solar auction with the support of the World Bank, and

“Augmentation of the operational capacity of all NIPP power plants under the Niger Delta Power Holding Company to at least 50% capacity. They all currently operate below 20% capacity”, as some of the steps so far taken.

Adelabu affirmed that there were fundamental issues that must be addressed in the sector.

He said, the issues have been investigated, therefore, appealed to Nigerians for patience to resolve them.

He claimed that there are people who don’t want the sector to work, thus sabotaging government’s efforts in the sector, but vowed to smoke them out and allow the sector to work, declaring that he is the right person for the job, and won’t resign his appointment.

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