Nigeria’s Power Minister, Adebayo Adelabu, has revealed that the country will require an annual investment of $10 billion over the next 10 years to revitalize its ailing electricity generation, distribution, and supply chain. This significant investment is necessary to address the sector’s liquidity challenges and ensure the sustainability of the power sector.
Adelabu made this disclosure during a one-day investigative hearing on the proposed increase in electricity tariff by 11 electricity distribution companies. The hearing was organized by the Senate Committee on Power, amidst the biting economic situation in Nigeria.
The Minister emphasized that the government cannot afford to pay the outstanding N2.9 trillion subsidy, citing limited resources. He appealed to lawmakers to support the process of paying the debt owed operators across the value chain of generation, transmission, and distribution.
Adelabu also pointed out the need for commercial pricing to make the sector attractive to investors and lenders. He noted that the absence of liquidity is a major challenge in the sector, which has been operating on a subsidized tariff regime. The Minister attributed the poor power supply to the low supply of gas to generating companies (GenCos) and emphasized the importance of resolving the gas supply issue to stabilize the power sector.
The Minister’s statement drew anger from lawmakers, who lamented the country’s power situation and the experiences of Nigerians on electricity supply over the years. Senators expressed concerns about the inefficiency of power sector operators, the lack of consultation before the tariff increase, and the need to consider a reversal of the tariff increase.
The hearing also addressed the non-appearance of a company, ZIGLAKS, over a failed agreement to provide prepaid meters for Nigerian electricity consumers. The company had received N32 billion in 20 years to meter Nigerian electricity consumers.
Stakeholders, including the Nigerian Electricity Regulatory Commission (NERC), Manufacturers Association of Nigeria (MAN), Association of Power Generation (Gencos), and Electricity Distribution Companies (DisCos), made presentations at the hearing.