President Bola Ahmed Tinubu has sanctioned partial settlement of all electricity sector liabilities, estimated at N3.3 trillion. Adebayo Adelabu, Nigeria’s Minister of Power, revealed this at Thursday’s 8th Africa Energy Marketplace in Abuja. He highlighted that the national government’s N1.3 trillion obligation to electricity-generating firms would be cleared through cash infusions and IOUs, while roughly $1.3 billion (N1.994 trillion at the current official exchange rate) owed to gas companies will be settled through cash and future royalties.
Adelabu emphasized that the federal government had commenced disbursement of the cash segment of the N1.3 trillion debt to Gencos and had finalized plans to repay the second segment through IOUs within two to five years. “The debt to power-generating companies stands at N1.3 trillion. I can also confirm that Mr. President has approved settlement upon the condition of reconciling these liabilities between the government and the power-generating firms.
“It is indeed factual that I mentioned Mr. President has authorized the Minister of State Petroleum (Gas) to clear the outstanding debts owed to gas suppliers by power sector operators. The payments will be phased. We have outstanding legacy debt and current debt. For the current debt, endorsement has been granted for a cash settlement of approximately N130 billion from the Gas Stabilisation Fund, which the Federal Ministry of Finance will remit if it hasn’t already,” he stated. In March, the government disbursed $120 million out of the $1.3 billion owed to gas companies. On multiple occasions, Adelabu has attributed the erratic power supply in the Country to indebtedness to Gencos.
Recollect that on April 3, the Nigerian Electricity Regulatory Commission endorsed a 230 per cent electricity rate hike for band A customers, who receive 20-24-hours power supply. A month later, the government reduced the hike by N18.2 to N206.8 per kilowatt-hour from 225kwh. Nevertheless, the Nigeria Labour Congress, Trade Union Congress, and other Nigerians have strongly opposed the hike, urging for its total reversal.
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