Boost For Electricity as FG Takes Action to Clear Important Debt Blocking Power Supply

Boost For Electricity as FG Takes Action to Clear Important Debt Blocking Power Supply

  • The minister of power, Adebayo Adelabu, has disclosed plans by the Nigerian government to defray the debt owed to gas suppliers in the power sector
  • The minister said Present Bola Tinubu had approved the payment of N130 billion out of the N2 trillion owed to the suppliers
  • He said there are plans to put gas suppliers on a contractual agreement to ensure regular supply to power-generating companies

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment, and the economy for over a decade.

The minister of power, Adebayo Adelabu, has announced that the Nigerian government is ready to pay N130 billion to gas suppliers out of the N2 trillion debt owed to them.

Adelabu disclosed this at the ongoing Africa Energy Market Place (AEMP) conference on Thursday, May 16, 2024.

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FG pays N130 billion to gas suppliers
The Nigerian government has said will pay N130 billion to gas suppliers Credit: NurPhoto
Source: UGC

FG pays N130 billion to gas suppliers

He said President Tinubu approved the submission of the minister of state for petroleum (Gas) to pay off the outstanding debt owed to the gas suppliers in the power sector.

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The power minister stated that the payments are in two parts: legacy debt and current debt.

He said the government approved a cash payment of N130 billion for the current debt from the gas and stabilization fund, which the federal ministry of finance will or has already paid.

ThisDay reports that the power minister disclosed in February 2024 that Nigeria owed N1.3 trillion to power-generating companies, 60% of which is owed to gas suppliers, and N2 trillion in legacy debt to gas companies.

According to the minister, plans are being made to adopt a new contract model with the gas suppliers to keep them under contractual obligation to supply gas to energize generating companies continuously to ensure a consistent power supply.

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Power generating company moves to write off N200 billion debt from electricity operators

NERC approves additional feeders for Band A

Adelabu stated that one of the shortcomings in the government’s implementation of the power sector privatization process was the focus on capital acquisition, which is money paid by investors to the federal government for taking over the distribution companies' structures.

The minister also revealed that the revised tariff has been effective, saying that it has brought down the cost of electricity for affected consumers, who now use more than 20 hours of electricity daily.

Reports say the minister said the Nigerian Electricity Regulatory Commission (NERC) approved additional feeders to supplement the earlier 500 feeders supplying electricity to Band A users.

Power company to write off N200bn debt

Legit.ng reported that the managing Director Niger Delta Power Holding Company, Chiedu Ugbo, disclosed to members of the House of Representatives Committee on Power that the company will be forced to write off an N200 billion debt owed to it by operators.

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The development is because the debt continues to accrue as the Nigerian Bulk Traders (NBET) pays the operators.

FG orders reduction of power supply to 3 countries

Legit.ng previously reported that the Nigerian Electricity Regulatory Commission (NERC) is set to enhance power supply to domestic consumers following its orders directing the System Operator (SO) to cap supplies to international customers by 6 percent of domestic supplies.

The affected countries include Togo, Benin Republic and the Niger Republic.

The development comes amid a high level of indebtedness and non-remittance of electricity bills supplied to the countries over the years.

Source: Legit.ng

Authors:
Pascal Oparada avatar

Pascal Oparada (Business editor) Pascal Oparada is a Mass Communications Graduate from Yaba College of Technology with over 10 years of experience in journalism. He has worked in reputable media organizations such as Daily Independent, TheNiche newspaper, and the Nigerian Xpress. He is a 2018 PwC Media Excellence Award winner. Email:pascal.oparada@corp.legit.ng

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