The Federal Government has embarked on a comprehensive effort to address the substantial debt inherited in the power sector, aiming to offset at least N3 trillion in outstanding liabilities.
Mr. Adebayo Adelabu, the Minister of Power, disclosed this during a press briefing in Abuja on Wednesday.
Adelabu highlighted that the current debt owed within the power sector stands at N1.3 trillion to Power Generating Companies (GenCos), with a significant portion owed to gas suppliers. Additionally, a legacy debt of $1.3 billion, dating back to before 2014, translates to nearly two trillion Naira at present rates.
He emphasized the need for transparency regarding the sector’s challenges, stressing that Nigerians deserve clarity on the path forward. Adelabu outlined the government’s strategy, which involves a combination of cash payments and guaranteed debt instruments to settle outstanding obligations to gas suppliers and power generation companies.
Collaborating with the Ministry of Finance, Budget, and Economic Planning, as well as the Office of the Special Adviser on Energy to the President, the Ministry of Power aims to expedite the resolution of these debts.
Adelabu pointed out various technical and operational challenges plaguing the electricity supply value chain, including gas supply shortages, aging generation infrastructure, inadequate power evacuation capacity, and distribution infrastructure deficiencies.
To address these issues, the government plans to pursue a multi-faceted approach, including infrastructure investments, capacity expansion, and transmission automation. Diversification of power generation to incorporate renewables, such as solar and wind technology, is also prioritized.
The Minister highlighted ongoing initiatives to enhance power supply, including the completion and resuscitation of hydroelectric and thermal power plants across the country. Additionally, plans are in place to develop small and medium-sized hydroelectric plants, implement solar hybridization projects, and complete wind/solar hybrid power plants.
Efforts to strengthen sectoral regulation, technical inspection, and expertise development are underway to ensure sustainable improvements in power supply.
In conclusion, Adelabu reiterated the government’s commitment to addressing the power sector’s challenges comprehensively, emphasizing the importance of collaboration between stakeholders to achieve lasting solutions.