In a significant move to bolster liquidity in Nigeria’s power sector, the federal government has settled N205 billion out of the N1.3 trillion owed to Generation Companies (Gencos).
This was revealed by the Minister of Power, Adebayo Adelabu, during an oversight visit to the House of Representatives in Abuja.
“Just about three weeks ago, out of the about N1.3 trillion we owe the Generation Companies (Gencos), we were able to pay them N205 billion. And they are also happy,” Adelabu said, emphasizing the government’s commitment to addressing the sector’s long-standing financial challenges.
Upgrading Aging Power Infrastructure
According to Adelabu, the recent improvements in electricity supply across the country are not solely attributable to seasonal factors, but rather the result of deliberate actions taken by the administration.
“A lot of the towers are falling. The substations are dilapidated with very old transformers, some of which were installed in the 60s. We have not been able to replace them. The same thing with distribution infrastructure. The substations at the distribution level are also not working properly,” Adelabu acknowledged, highlighting the urgent need to address the country’s aging power infrastructure.
The minister emphasized the ministry’s target to install two million meters annually over the next five years, aiming to close the significant metering gap.
“Out of over 12 million electricity customers nationwide, only slightly more than five million are metered, leaving a shortfall of over seven million meters,” he noted.
Accelerating the Siemens Power Initiative
Adelabu also provided updates on the Siemens power project, a landmark initiative aimed at upgrading Nigeria’s power generation, transmission, and distribution capabilities. He stated that the pilot phase of the project is nearing completion, with several pieces of equipment already installed across the country.
“We went to Germany together and we had a meeting with the German Chancellor that we needed to accelerate the implementation of the presidential power initiative, which you all know as the Siemens project. And the following month, we had a meeting in Dubai and we signed an acceleration agreement to ensure that we continued with this project. And I can tell you, within one year, we have almost concluded the pilot phase of this project,” Adelabu said, expressing optimism about the project’s progress.
Avoiding a Nationwide Blackout
Amid the ongoing economic challenges, including fuel scarcity, Adelabu emphasized the critical importance of avoiding a nationwide blackout that would further strain Nigerians’ quality of life.
“Given the ongoing economic challenges in the country, including fuel scarcity, it is crucial to avoid a national blackout that would further strain Nigerians’ quality of life,” he stated, underscoring the need for a comprehensive approach to addressing the power sector’s challenges.
Revising Tariff Policies and Seeking Holistic Solutions
Adelabu also highlighted the need to revisit the existing tariff policy and stressed that all aspects of the power sector require attention. “The same thing with distribution infrastructure. The substations at the distribution level are also not working properly,” he added.
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Overall, the minister’s remarks during the oversight visit suggest a renewed focus on resolving the long-standing issues plaguing Nigeria’s power sector. The government’s efforts to settle outstanding debts, upgrade aging infrastructure, and accelerate the Siemens power initiative reflect a comprehensive strategy to improve the reliability and accessibility of electricity supply across the country.
If You Ask Me
As the present administration navigates the challenges of the power sector, stakeholders will be closely watching the implementation of these initiatives and their impact on Nigeria’s energy landscape in the years to come.
