|
Getting your Trinity Audio player ready...
|
FG to remove subsidy on electricity over $1.3 billion debt to power companies
The Minister of Power, Adebayo Adelabu, has revealed that the federal government is planning to shift towards a sustainable tariff model, citing the country’s substantial debts to power generating and gas companies.
In a press conference held in Abuja, Adelabu stated that the current 1.3 trillion naira debt to GenCos and 1.3 billion dollars owed to gas companies underscores the urgency of moving away from subsidizing electricity.
With only 450 billion naira allocated for subsidies this year against the ministry’s estimated requirement of over 2 trillion naira, Adelabu emphasised the necessity of a cost-effective approach.
He also announced that state governments would now be permitted to independently generate power to cater to their respective regions.
READ ALSO: FG subsidises electricity with N135.23bn in Q2, 2023 – NERC
Addressing recent grid failures attributed to gas shortages, aging infrastructure, limited power evacuation capacity, and damage to power stations in the North-East, Adelabu revealed that the Transmission Company of Nigeria has numerous stalled projects due to fluctuating contract figures.
Consequently, no new contracts will be awarded until these existing projects are completed.
Additionally, the minister disclosed that a significant allocation of over 50 billion naira in the 2024 budget is earmarked for constructing mini-grids to provide electricity to remote areas.
Adelabu also issued a stern warning to electricity distribution companies, stating that non-compliance would result in the revocation of licenses.
In a bid to safeguard power infrastructure, Adelabu revealed his coordination with National Security Adviser Nuhu Ribadu to enhance security measures around critical energy assets.
Follow the Neptune Prime channel on WhatsApp: https://whatsapp.com/channel/0029Va74ZvU2v1IqKByXoX3d
Do you have breaking news, interview request, opinion, suggestion, or want your event covered? Email us at neptuneprime2233@gmail.com
