Nigeria’s Minister of Power, Chief Adebayo Adelabu, has restated the Federal Government’s determination to implement cost-reflective electricity tariffs as part of broader efforts to tackle the enduring liquidity crisis in the sector.
Speaking on Tuesday at the Mission 300 Stakeholders Engagement meeting in Abuja, Adelabu explained that authorities are considering multiple strategies to clear the staggering N4 trillion debt owed to power generation companies – a burden largely caused by the government’s persistent inability to fully cover electricity subsidies.
He revealed that the administration intends to phase out the blanket subsidy regime, replacing it with targeted assistance for low-income and vulnerable households to ensure equitable access without distorting market fundamentals.
According to a statement from his office, the Minister outlined key priorities for ongoing power sector reforms, notably addressing liquidity constraints and pushing through essential structural changes to stabilise the industry.
“Currently, there’s a huge outstanding debt to the Power Generation companies in the form of unpaid government subsidies which stands at about N4 trillion as of December 2024. The Federal Government is already working out modalities to defray this obligation and to ensure that further obligations are not accrued going forward, the government is working on a plan to transition the sector to a fully cost-reflective regime while implementing targeted subsidies for the economically vulnerable citizens in the country.
“Improving our power generation through recovery of idle capacities and expanding energy mix to ensure energy security, and to dilute the power pool with cheaper and cleaner energy sources”.
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Chief Adebayo Adelabu also highlighted other critical focus areas for the government’s power sector reforms, including expanding transmission infrastructure to enhance electricity delivery nationwide and stabilising the national grid to eliminate the frequent disturbances and collapses that have plagued it in recent years. He emphasised that improving grid reliability would remain central to the ministry’s agenda.
The Minister underscored the importance of boosting the viability and operational performance of electricity distribution companies, referencing initiatives such as the Presidential Metering Initiative and the World Bank-supported Distribution Sector Recovery Program (DISREP), which are designed to close metering gaps and drive efficiency within the distribution segment.
Reaffirming the administration’s resolve to establish a sustainable and bankable power sector, Adelabu stressed that each reform effort underway is geared towards restoring confidence and unlocking long-term investment into the industry.
On Mission 300 – an ambitious project targeting electricity access for 300 million people across Africa – Adelabu revealed that its compact will require an estimated investment of $32.8 billion, with the private sector expected to contribute around $15.5 billion towards the goal.