President Bola Ahmed Tinubu has approved part payment of all power sector debts, estimated at N3.3 trillion.
Adebayo Adelabu, Nigeria’s Minister of Power, disclosed this at Thursday’s 8th Africa Energy Marketplace in Abuja.
He noted that the federal government’s N1.3 trillion debt to power-generating companies would be paid via cash injections and promissory notes, while about $1.3 billion (N1.994 trillion using the current official closing rate) owed to gas companies will be paid via cash and future royalties.
Adelabu stressed that the federal government had commenced payment of the cash part of the N1.3 trillion debt owed Gencos and concluded plans to settle the second part via promissory notes within two to five years.
“The debt for the power-generating companies is N1.3tn. I can also tell you that Mr. President has consented to pay on the condition of reconciling these debts between the government and the power-generating companies.
“It is true that I mentioned that Mr President has approved the submission of the Hon. Minister of State Petroleum (Gas) to defray the outstanding debts owed to the gas supplying companies to the power sector operators.
“The payments will be in parts. We have the legacy debt and the current debt. For the current debt, approval has been given for a cash payment of about N130bn from the Gas Stabilisation Fund, which the Federal Ministry of Finance will pay if it hasn’t already,” he said.
In March, the government paid $120 million out of the $1.3bn indebtedness to gas companies.
On different occasions, Adelabu has blamed indebtedness to gencos for the epileptic power supply in the country.
Recall that on April 3, the Nigerian Electricity Regulatory Commission approved a 230 per cent electricity tariff hike for band A customers, who receive a 20-24 power supply.
A month later, the government slashed the hike by N18.2 to N206.8 per kilowatt-hour from 225kwh.
However, the Nigeria Labour Congress, Trade Union Congress, and other Nigerians have kicked against the hike, calling for its complete reversal.