Relieve came the way of Gencos on Thursday as President Bola Tinubu finally approved the payment of over N4 trillion in debt owed them—a liability that almost paralysed the operations of the power sector.
Minister of Power Chief Adebayo Adelabu, announced this good news on Thursday during an event to mark the 20th anniversary of the Nigerian Electricity Regulatory Commission (NERC), in Abuja.
Adalabu, who explained that the president has approved a N4 trillion bond to clear verified generation companies (GenCos) and gas supply debts, added that alongside this is the commercialisation effort at developing a targeted subsidy framework to protect vulnerable households and ensure a sustainable path toward full cost recovery.
“I am pleased to inform you that Mr President has recently approved a N4 trillion bond to clear verified GenCos and gas supply debts. Alongside this is the commercialisation effort at developing a targeted subsidy framework to protect vulnerable households.”
“While we are implementing reforms to strengthen the financial and operational capacity of the distribution companies (DisCos), including considering minimum capital requirements during licence renewal, we must not neglect generation and transmission.”
‘We are also advancing the Presidential Power Initiative (the Siemens Project) and have sustained generation capacity at an average of 5,300 MW,” he said, just as he also challenged states to interrogate DisCos and the Transmission Company of Nigeria (TCN) to better serve their people.
“At the Federal Ministry of Power, our vision is one of co-operative federalism in the electricity sector—where both tiers of government work together in harmony for the common good. To this end, we are developing a National Electricity Policy Co-ordination Framework to ensure consistency and regulatory clarity, align federal and state actions; support states establishing new regulators; and strengthen investor confidence through policy.
“The Federal Government has provided the legal and policy framework. The states now have the autonomy to act. The private sector has the capital and innovation to invest,” the minister said.
The Vice Chairman of the commission, Dr Musiliu Oseni, in his address at the event, said that relative to 20 years ago, at least 30 per cent of the electricity consumers have experienced significant improvement in their electricity services.
Oseni said through effective regulation, the commission has saved the Federal Government several trillions of naira in subsidies thereby contributing to improved fiscal position of the federal government.
“As we continuously strive to provide regulatory oversights to ensure improved reliability of supply, the commission shall focus more attention on unlocking private investments especially in the transmission segment of the value chain. Our transmission networks require significant investments.
“However, our fiscal realities have shown that government alone cannot fund it. Necessary regulatory framework will go a long way in attracting private investments.”
“We have commenced the process through the creation of the Transmission Infrastructure Fund (TIF). I hope this effort will receive the necessary support from the policymakers. Another key priority area is continuous push for fiscal discipline and transparency at TCN. The commission shall continue the regulatory process for the transition to bilateral trading, and handholding of the state regulatory commissions for capacity development.
“There must be a deliberate policy by the federal government to power our industry for economic prosperity. You can power access through mini-grids but you can’t power your economy to prosperity,” Oseni said,
Oseni added there is urgent need for policy rethink on the utilisation of the $2 billion currently available to the Rural Electrification Agency (REA), advising that a substantial portion of the fund should be dedicated to providing end-to-end solution to the power supply challenges facing the industrial hubs.
