WorldStage Newsonline– The Federal Government has announced plans to pay Power Generation Companies (GenCos) two trillion Naira out of the four trillion Naira debt owed them before the end of 2025.
The Minister of Power, Mr Adebayo Adelabu said thi in Abuja at the 6th Edition of the 2025 Ministerial Press Briefing Series.
Adelabu was reacting to an appeal by the GenCos urging to the Federal Government and stakeholders in the power sector to settle than outstanding debts owed them for electricity generated.
“I can tell you that between now and the end of the year, we are going to pay close to two trillion Naira out of these four trillion Naira owed GenCos.
“These debts are primarily unpaid subsidies, almost half of it was inherited, while about half of came from 2024 operations
“There are plans underway to make these payments. I will not say it will be paid 100 per cent; we will be paying it gradually, ‘’ he said.
Adelabu said that the mode of payment would be in two ways, adding that there would be some budgetary provisions which will facilitate cash payments.
He said that government was also discussing with the GenCos to give them some guaranteed debt instruments like promissory notes.
“These promissory notes will be liquid enough for it to be taken to the banks for discounting if they need immediate cash injection.
“It is a combination of cash payments and promissory notes.
“I had discussions with the Minister of Finance and the Coordinating Minister for the Economy, who has promised that they are working on the promissory note, and once we have budget releases, cash payments will also be made. ‘’ he said.
Adelabu also said the government had earmarked N25 billion in the 2025 budget to light up major highways in the country as part of national security efforts.
The minister said that beyond just supplying power to homes and businesses,v lighting up highways was also part of the Federal Government’s strategy to improve security.
“I believe that this will continue in subsequent appropriation. We have noted it. I will ensure we start the process as soon as we start getting budget releases,” he said.
Speaking on subsidy, Adelabu said that government coild not a keep funding subsidy after privatisation which keeps growing on an annual basis.
“As our consumption grows, government subsidy keeps growing. So we need to nip it in the bud.
“We are not saying stop subsidy completely. But subsidy in the past has always been favouring the higher echelon in our society because of huge consumption.
“We want to devise a subsidy strategy that will favour the poor so that it will be graduated, If you consume energy to a particular threshold, you will enjoy subsidy.
“Once it is going above a particular threshold, the tariff will go up, so that the poor will not be impacted negatively because of subsidy,” he said.
Adelabu also said the Nigerian Electricity Regulatory Commissin (NERC) oversight function would remain strong in ensuring that Electricity Distribution Companies (DisCos) meet their service obligations.
The minister said that any DisCo charging Band A tariff but failing to provide 20 hours of electricity daily would be penalised.
“If it is discovered that any DisCo is collecting tariff but not supplying up to 20 hours, there are penalties.
“Recently eight DisCos were fined N628 million. The moment they are detected, they will be fined. Where you have feeders downgraded from band A, they are not expected to charge band A, ‘’ he said. tariff.
