Nigeria’s Power Sector Faces Unsustainable Subsidy Burden, Laments Adelabu
The Minister of Power, Chief Adebayo Adelabu, has warned that the Federal Government’s payment of electricity subsidy is becoming unsustainable, with a monthly subsidy shortfall of N200 billion.
The government is currently indebted to Generation Companies (GenCos) to the tune of N4 trillion, including N1.94 trillion for 2024 alone.
Adelabu stated that the government will soon embark on restructuring underperforming Distribution Companies (DisCos) and tightening enforcement of performance benchmarks.
However, he emphasized that without urgent capital injection into distribution networks, gains in generation and transmission upgrades will fail to translate to reliable household supply.
The Minister highlighted the persistent crisis threatening to derail progress in the sector, which is chronic underinvestment in distribution infrastructure. This has crippled service delivery nationwide, despite landmark reforms in the electricity sector.
Adelabu revealed that despite tariff adjustments that boosted market liquidity by 70 percent, the distribution segment remains the weakest link.
The Minister noted that there are glaring disparities in DisCo performance, with aging networks, rampant electricity theft, and poor investment deepening reliance on unsustainable subsidies and leaving millions in darkness.
He emphasized the need to get tough with underperforming DisCos, as they can easily frustrate all the gains made in generation and transmission.
Adelabu highlighted the metering gap as a key driver of revenue loss and consumer distrust, underscoring systemic neglect.
The government has launched a N700 billion Presidential Metering Initiative (PMI) and a World Bank-backed program targeting 4.3 million meters by 2025.
However, the Minister acknowledged that closing this gap is fundamental to fair billing and financial sustainability, but noted that they are not there yet due to underinvestment and operational inefficiencies.
The Minister highlighted plans to attract private investment into grid infrastructure and regionalize transmission networks to reduce failure risks.
He also spoke of plans to boost power supply in the Northern part of the country, including the development of the Makurdi hydropower project and the revitalization of the Kaduna thermal plants.
Adelabu called on the National Assembly to enact stricter legislation aimed at safeguarding Nigeria’s power infrastructure from acts of vandalism.
He emphasized the need for enhanced legal measures, stressing that robust laws are critical to deterring the destruction of vital energy assets and ensuring the stability of the nation’s electricity supply.
