The Minister of Power, Adebayo Adelabu, has disclosed that the federal government owes electricity generation companies (GenCos) and distribution companies (DisCos) over N4 trillion in subsidies.
He noted that the huge debt burden has hindered the power sector’s ability to deliver optimal service to consumers.
Adelabu disclosed this on Thursday during the Public Presentation of the National Integrated Electricity Policy (NIEP) and Nigeria Integrated Resource Plan (NIRP) in Abuja.
He emphasized that the mounting debt poses a critical challenge to maintaining and improving electricity infrastructure in the country.
Breaking down the debt, the minister said the federal government owes GenCos N2 trillion as legacy debt, while an additional N1.9 trillion is owed to them as part of the 2024 electricity subsidy.
DisCos are also owed N450 billion for the 2024 subsidy, further straining the sector’s financial health.
The minister stressed the unsustainability of the current subsidy model, indicating that a new approach is being developed to target only those in genuine need of government support.
“How do you expect the GenCos to perform optimally? How do you expect them to pay for gas, service and maintain their turbines and other infrastructure as well as pay their staff if a total of N4 trillion is being owed to them?” Adelabu questioned.
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