The Federal Government is working on transitioning Nigeria’s electricity market to a cost-reflective tariff regime in a bid to halt the mounting N4 trillion debt owed to power generation companies, the Minister of Power, Adebayo Adelabu, has disclosed.
Speaking during the Mission 300 Stakeholders’ Engagement held in Abuja, Adelabu said the reform is part of a broader strategy to place the power sector on a sustainable and bankable path.
“Currently, there’s a huge outstanding debt to the power generation companies in the form of unpaid government subsidies, which stands at about N4 trillion as of December 2024,” he noted.
He explained that the government is putting together a modal plan to clear the debt and avoid further accrual by moving towards a fully cost-reflective tariff structure, while simultaneously providing targeted subsidies for economically vulnerable citizens.
Although electricity tariffs for Band A customers were recently increased, many consumers have continued to express dissatisfaction over poor electricity supply and the ongoing charges for faulty installations.
Nonetheless, Adelabu insisted the shift is crucial to Nigeria’s economic stability. “This decision is critical to the economic growth and development of the nation,” he stated.
