July 21, 2024
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ELECTRICITY

Why Tinubu Approved N2 Trillion to GenCos

Nigeria’s President Bola Ahmed Tinubu has approved a payment of N2 trillion to settle legacy debts owed to power generation companies (GenCos), following threats from gas companies to declare force majeure. The payment will clear outstanding debts to gas companies, ensuring a steady gas supply for the power sector.

Nigeria’s Minister for Power, Adebayo Adelabu, revealed this at the BusinessDay Energy Conference in Lagos, noting that the federal government will launch the World Bank Distributed Access through Renewable Energy Scale-up (DARES), a $750 million initiative aimed at increasing electricity access.

“This initiative complements the recently concluded $550 million Nigeria Electrification Plan, which has provided electricity to over 1.1 million households, MSMEs, and educational and healthcare facilities in underserved rural communities,” Adelabu said.

Adelabu emphasized the importance of the global shift towards renewable energy for both environmental and economic reasons. “Nigeria is blessed with abundant renewable resources. We aim to tap into these sources to diversify our energy mix, reduce our carbon footprint, and ensure energy security.”

He further explained that the government has secured presidential approval to settle legacy debts to gas companies, allowing for efficient gas supply to the power sector. Additionally, a payment mechanism has been established to address debts owed to generation companies, ensuring necessary maintenance and optimizing evacuation capacity.

“With these efforts, we aim to not only increase our generation capacity but also improve the efficiency and reliability of our power supply,” Adelabu concluded.

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