Tinubu Approves N3.3 Trillion Payment For Power Sector Debts – Adelabu

Tinubu Approves N3.3 Trillion Payment For Power Sector Debts – Adelabu

Published on May 17, 2024
By Noah Abdulsalam

President Bola Ahmed Tinubu has authorized partial payments towards settling the power sector’s outstanding debts, totaling N3.3 trillion…..read also Vice President Shettima Commends Tinubu For Financial Transparency

Nigeria’s Minister of Power, Adebayo Adelabu, announced this at the 8th Africa Energy Marketplace in Abuja on Thursday. He revealed that the federal government’s N1.3 trillion debt to power-generating companies (Gencos) would be addressed through cash injections and promissory notes. Additionally, about $1.3 billion (N1.994 trillion) owed to gas companies will be paid using a combination of cash and future royalties.

Adelabu emphasized that the federal government has already begun paying the cash portion of the N1.3 trillion owed to Gencos and plans to settle the remainder with promissory notes over the next two to five years. He stated, “The debt for the power-generating companies is N1.3 trillion. Mr. President has consented to payment, contingent upon reconciling these debts between the government and the power-generating companies.”

He confirmed that Mr. President has approved the proposal by the Minister of State Petroleum (Gas) to address the outstanding debts to gas suppliers. “Payments will be phased, covering both legacy and current debts. For the current debt, approval has been granted for a cash payment of about N130 billion from the Gas Stabilisation Fund, to be disbursed by the Federal Ministry of Finance.”

In March, the government paid $120 million of the $1.3 billion owed to gas companies. Adelabu has repeatedly attributed the country’s intermittent power supply to the indebtedness to Gencos.

On April 3, the Nigerian Electricity Regulatory Commission approved a 230 percent tariff increase for band A customers, who receive 20-24 hours of power supply. A month later, the government reduced the increase by N18.2 to N206.8 per kilowatt-hour from 225kwh. However, the Nigeria Labour Congress, Trade Union Congress, and other citizens have protested the hike, demanding its complete reversal.