The Nigerian Minister of Power, Adebayo Adelabu, has announced the government’s commitment to clearing over ₦3 trillion debt inherited in the power sector. The minister revealed that a significant portion of the debt, amounting to ₦1.3 trillion, is owed to Power Generating Companies (GenCos), with 60% of it attributed to gas suppliers.
Addressing the press in Abuja, Mr. Adelabu emphasized that the legacy debt of $1.3 billion prior to 2014, owed to gas supplier companies at current rates, translates to close to ₦2 trillion. When combined with the outstanding debt to GenCos, it totals over ₦3 trillion in the power sector.
The minister outlined the government’s plan to settle the existing outstanding debt obligations to gas supply and power generation companies through a combination of cash payments and guaranteed debt instruments. He also mentioned collaborations with various ministries and offices to address the issues at hand.
Mr. Adelabu shed light on the technical and operational challenges within the electricity supply value chain, pointing out issues such as gas supply shortages, aging generation machinery, inadequate power evacuation capacity, and fragile transmission lines. He also highlighted the need for increased investment and diversification of power generation to incorporate renewables.
In an effort to improve power supply, the government is undertaking activities such as hydro plant augmentation, completion of hydro and wind/solar hybrid power plants, and the development of small and medium-sized hydro plants across the country. Additionally, there are plans for rural electrification and the support of solar energy projects.
With these strategic initiatives and the government’s unwavering commitment, Nigeria aims to address the outstanding debt in the power sector and pave the way for a more sustainable and resilient electricity supply system for the nation.
This article was originally published by Daily Nigerian and has been edited for a global audience.
