The Federal Government of Nigeria is indebted to the generating companies (GenCos) in the tune of 1.3 trillion naira.
This was disclosed on Wednesday by Adebayo Adelabu, the Minister of Power, who said the country cannot continue to subsidise electricity.
According to the Minister, the nation must begin to move towards a cost-effective tariff model, as the country is currently indebted to the tune of 1.3 trillion naira to generating companies (GenCos) and 1.3 billion dollars owed gas companies.
Adelabu, addressed a press conference in Abuja on Wednesday, said only 450 billion naira was budgeted for electricity subsidy this year but the ministry needs over 2 trillion naira for subsidy.
He said state governments will now be allowed to generate power independently to supply power to their states.
Recall that the International Monetary Fund (IMF), had made similar recommendation to the Nigerian government to end electricity subsidy.
On the grid that has collapsed for about six times between December 2023 and now, the Minister said this was caused by shortage of gas, ageing machines in the grid value chain, low capacity to evacuate generated power, and destruction of power stations in some parts of the North-East geopolitical zone of the country.
He said the Transmission Company of Nigeria has over 100 abandoned projects due to variations on contract figures as a result of the fluctuations of the forex, hence the company will not award any new contracts till all such projects are completed.
The minister also said over 50 billion naira has been earmarked in the 2024 budget to build mini grids to supply power to remote areas.
He said electricity distribution companies (DisCos) should sit up otherwise anyone found wanting will have his licence withdrawn.
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