Aiming to increase liquidity in the power industry, the federal government declared that it had paid Generation Companies (Gencos) N205 billion of the N1.3 trillion that was outstanding to them.
Adebayo Adelabu, the Minister of Power, disclosed this to MPs on Monday during an oversight visit to the House of Representatives in Abuja.
According to him, the payment represented a portion of the debt owed by the government to the various power company subsidiaries.
The government also owes these corporations in terms of markets and liquidity, but they have begun to make payments gradually.
Three weeks ago or so, we managed to pay the Generation Companies (Gencos) N205 billion of the approximately N1.3 trillion we owe them. They are also joyful.
Adelabu remarked, “But I will beg the House committee members to help us mount pressure on the executive to continue to pay these people.”
He pointed out that the Bola Tinubu administration’s intentional initiatives, rather than the rainy season, are responsible for the recent improvements in energy delivery in various parts of the nation.
Building Up Power Infrastructure
Speaking further, Adelabu stated that it is imperative to prevent a national blackout that would worsen the standard of living for Nigerians in light of the country’s ongoing economic difficulties, especially the paucity of fuel.
He underlined the necessity of modernizing the nation’s electrical infrastructure and reviewing the current pricing strategy, emphasizing that all facets of the power industry need to be given careful consideration.
“A number of the towers are collapsing. The transformers in the substations are quite old and in disrepair; some of them were installed in the 1960s. We are unable to find a replacement for them. The distribution infrastructure is the same. Additionally, the distribution level substations are malfunctioning,” he continued.
Adelabu also called attention to the metering gap, pointing out that just a little over five million of the country’s twelve million electricity users are metered, leaving a deficit of more than seven million meters.
After describing the ministry’s goal of installing two million meters a year for the next five years, he was upbeat about the sector’s current advancement after it had been viewed as stationary for the previous fifteen.
Adelabu stated that the Siemens project is almost finished in its pilot phase and that numerous of the project’s equipment has already been put all around the nation.
“We traveled to Germany as a group and discussed with the German Chancellor the necessity of expediting the implementation of the Siemens project, also known as the Presidential Power Initiative.”
“And to make sure we carried out this initiative, we signed an acceleration agreement during a conference in Dubai the following month. And I can assure you that we have nearly finished this project’s pilot phase in less than a year.”
“The pilot phase involved the importation, commissioning, and installation of ten power transformers and ten electricity mobile substations across Nigeria. So the improvement you witness today is not an accident. It’s not because of rain.”
“Hydroelectric power in Nigeria today is just a bit over 20 percent of our total power generated. Nearly 80% of the remainder comes from petrol. Therefore, it is not raining, but rather the deliberate actions of the federal government carried out by the ministry of power. That is why we are witnessing all of these changes,” Adelabu explained.
What to note
The power industry still faces difficulties even after numerous government interventions, mostly as a result of underinvestment and low system liquidity.
The Nigerian Electricity delivery Industry (NESI) owed N1.3 trillion for gas delivery, and the federal government declared in May that N130 billion would be used to satisfy some of these obligations.
The government is making a continuing effort to collect debt as part of its efforts to boost sector liquidity and, consequently, ensure a rise in the supply of electricity.
