Nigeria’s Minister for Power, Adebayo Adelabu says the country will need approximately $10 billion in annual investments over the next decade to rejuvenate its power sector.
Speaking in Abuja during a one-day investigative hearing on the halt of electricity tariff increases by the Nigerian Electricity Regulatory Commission (NERC), organized by the Senate Committee on Power, Adelabu emphasized that to revitalize the sector, the government must allocate no less than $10 billion each year for the next ten years.
He highlighted the necessity of making the power sector appealing to investors, stressing that the importance of commercial pricing to attract investment, asserting that maintaining the current tariff levels without government subsidy would deter investors. Adelabu noted increased investor interest following tariff adjustments for specific bands.
“If the value is still at N66 and the government is not paying subsidy, the investors will not come. But now that we have increased tariff for a Band, interests are being shown by investors.”
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The minister identified the primary challenge in the sector as liquidity issues, exacerbated by years of operating under subsidized tariffs without reflecting the actual costs. This situation has resulted in substantial liabilities owed to Generating Companies (GenCos) and Gas Companies.
Adelabu explained that the government’s inability to settle the outstanding N2.9 trillion subsidy debt stems from limited resources, necessitating sustainable measures to support the sector.
Adelabu appealed to lawmakers for support in settling the debts owed to operators throughout the generation, transmission, and distribution segments.
He clarified that tariff increases would be contingent on consistent power supply, with customers not expected to pay the new tariff if they did not receive a minimum of 20 hours of power supply.
