The federal government, led by Bola Tinubu, has announced its intention to stop subsidizing electricity.
Adebayo Adelabu, the Minister of Power, revealed this during a press conference in Abuja on February 14.
Adelabu emphasized that Nigeria cannot continue to subsidize electricity and must transition to a more cost-effective tariff system.
The minister also highlighted that the country currently owes 1.3 trillion naira to generating companies (GenCos) and 1.3 billion dollars to gas companies.
Adelabu mentioned that only 450 billion naira has been allocated for subsidy this year, while the ministry requires over 2 trillion naira.
Additionally, state governments will now have the opportunity to independently generate power for their respective states.
The grid has collapsed multiple times between December 2023 and now. The reasons for this include a shortage of gas, old machines in the grid value chain, a lack of capacity to handle generated power, and the destruction of power stations in certain parts of the North-East region of the country.
The Transmission Company of Nigeria has more than 100 unfinished projects due to changes in contract figures caused by fluctuations in foreign exchange rates. As a result, the company will not be awarding any new contracts until all of these projects are completed.
In the 2024 budget, over 50 billion naira has been allocated to construct mini grids that will provide power to remote areas.
The minister has warned electricity distribution companies (DisCos) to improve their performance, as those found to be lacking will have their licenses revoked.
Additionally, the minister has sought assistance from the National Security Adviser, Nuhu Ribadu, to ensure the security of power infrastructure.
