Nigerian Govt Requires N3 Trillion To Stabilise Electricity Supply

The Nigerian government has confidently declared that an amount of less than N3 trillion is imperative to ensure stability in the electricity sector.
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Chief Adebayo Adelabu, Minister of Power disclosed at a press conference to unveil a road map to stabilizing the sector in preparation for tuturnaroundnd transformation.
According to Adelabu, the figure would be used for settlement of existing sectoral outstanding debt obligations to the Gas Supply and Power Generation companies using partly cash payment and guaranteed debt instruments.
He said that N1.3 trillion is current debts to the GenCos and $1.3 billion legacy debts to the GasCos, all amounting to over N3 trillion.
The Minister also stated that there is a need to convene a national discourse on the nation’s perspective on electricity supply, to determine whether it is classified as a commercial product or a social service, emphasising the importance of agreement across divides on how we define electricity.
“Depending on the outcome of the above, either implementation of a cost reflective tariff or a cashed backed Federal government guaranteed subsidy funding regime to inject liquidity into the sector.
“Increased investments across the value chain for infrastructural improvements, capacity expansion, and transmission automation.
“Diversification of power generation to absorb renewables and facilitate the nation’s journey to Energy Transition target.
“Encourage distributed power strategy in conjunction with sub-national government focussing on embedded power model to reduce pressure on the National grid, and to ensure alternative electricity supply to DISCOS.
“Development of a rural electrification plan from a bottom-update top-down approach, to identify the unserved and the underserved rural”, he said.
Adelabu, who briefed journalists in the company of all the heads of Parastatals in the ministry, described the situation of the power sector as complicated and ted that the debts kept piling up because susubsidies not being paid.
He compared the current electricity situation to a choice between the devil and the deep blue sea, with either implementing cost-effective tariffs or the government paying the subsidy, which runs into billions of naira.
Adelabu said he undertook a tour of several power plants and was close to tears because some of the plants currently operate below 20% Capacity.
He vowed to confront the issues headlong and achieve the desired incremental power supply within the life of resident Ahmed Bola Tinubu’s administration, urging Nigerians to be science.
The Minister said his team had embarked on results-oriented programmes aimed at bringing the sector to the desired goals among which include: “Start projects of reconductoring of existing aging Transmission power lines. Speed up intervention projects funded by local multilateral development partners aimed at repairing transmission infrastructure. This includes World Bank, ADB, and JICA Improvement to Distribution Infrastructures.
“Direct Intervention by the federal government in the provision of distribution transformers, electric Poles, and power lines in ununderservedommunities not so attractive to Discos for investments. Budget prprovisionsave have been made for this in 2024 Appropriation.
“Acceleration of all Metering Acquisition programs harmonizing all under the Presidential Material Initiatives under my oversight. Counter Party Seed Funds have been made available for this to complement other financing options.
“Revitalizing the Discos for better performance by restructuring them along state lines in harmony with respective state governments and MOFI. Introduction of stiff sanctions for non-performing Discos without fear or favour. NERC has been charged to raise their game in this respect. Establishing customer Complaints. Escalation Desk at all NERC offices across the 36 states and FCT.
“Technical and Operational Capacity upgrades for NEMSA and NAPTIN. Renewable and Rural Electrification Option to bridge existing gap in Grid Supply. Commissioning of hundreds of ongoing mini/microgrids projects of the Rural Electrification Agency across the country.
“Augmentation of the operational capacity of all NIPP power plants under the Niger Delta Power Holding Company to at least 50% capacity. They all currently operate below 20% Capacity.
“Resolution of the Gas Supply Issues to the Gencos: In collaboration with the Ministry of Finance, Budget, and Economic Planning, as well as the office of the President’s Special Adviser on Energy, to settle the massive outstanding debt obligations to the Gencos and the Gencos, using cash injection and guaranteed debt instruments.
“Working with the Minister of State for Petroleum Resources (Gas), to have a working arrangement for firm gas supply contracts for the Gencos and possibly agree on Gas to power domestic supply pricing in local currency to reduce price fluctuations.
“Fixing Transmission infrastructure in evacuation Lines stability and capacity expansion.
“Accelerating the Presidential Power Initiatives (Siemens Project) with completion of the Pilot phase of the project and commencement of Phase One to increase Transmission capacity to 8,000MW.
“Accelerating talks on the EPC+F super grid projects with two Chinese firms for the Western and Eastern Grid for fafailoverack up Capacity for the National grid to achieve grid stability and capacity expansion.
“Resolve to complete a reasonable proportion out of the over 100 ongoing uncompleted TCN projects for Transmission improvements. No new project for 2024 as the focus will be on completing ongoing projects abandoned due to cost escalation from variations and fluctuations in contract price.
“Upgrading of old and weak 330KV and 132KV Transmission substations with new and higher capacity transformers, reactors, and other accessories.
“Development of 8 rural electrification plans from a bottom-up and a top-down approach, to identify the unserved and the underserved rural and suburban communities. This will enable the government to direct targeted subsidies through rural electrification agencies at a national and sub-national level using renewables (small hydro, solar mimicrogridsolar home systems, and wind technology
“Develop and expand capacity for sectoral regulation, technical inspection, and sectoral expertise. NERC NEMSA NAPTIN to be the forum of capacity and operational upgrade”.
He further stated that ongoing activities in the Ministry and its Agencies to improve Power Supply include: “Augmentation of the Hydro and Thermal Power Plants:Operational Capacity.
“The recent completion of the 700MW Zungeru Hydro Electricity Power Plant in Niger State.
“Financing the required infrastructure to enable complete evacuation of the 40MW Kashimbila Hydro Power Plant in Taraba state using Promissory Note facility at the Debt Management ofOfficeDMO).
“Resuscitation of abandoned 26 small and medium-sized hydro plants across the country with Solar hybridization. This will adopt an embedded power model with connectivity to the regional Discos distribution network.
“Completion of the 2OMW Wind/Solar hybrid power plant in Katsina state, Completion of infrastructure required for complete evacuation of the 30 million Gurara Dam Power Plant.
“Revisitation of the abandoned 15 IPP solar plants in the country’s northern region, as well as the development of an IPP solar auction with World Bank support, among other things.”