N450bn budgeted for electricity subsidy in 2024 — FG

The debt crises in the electricity sector are set to worsen with the federal government stating that N450bn was budgeted for subsidy in 2024 despite the Nigerian Electricity Regulatory Commission (NERC) approving N2.3tr subsidy for the year.

The debt crisis in the sector has been blamed for lack of investment in the sector that has paved the way for epileptic power supply.

Bolaji Tunji, the media aide to the Minister of Power, Adebayo Adelabu, who made the disclosure during an interview with The Punch said the debt is one of the issues that made the minister not to fulfill his promise to provide 6,000 megawatt of electricity by December.

“One of the key issues has been the cash backing of the subsidy, which relates to debt owed to generation companies and gas companies. This year’s subsidy will be approximately N2.3tn, but only N450bn was budgeted. Another issue has been the fragility of the transmission grid due to the level of vandalism.”

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On possible solutions to improve generation in 2025, the media adviser said, “Firstly, the government will make improved provision in the budget for subsidies to ensure payments are made on time. We will continue to push to ensure the market continues to pay for the electricity consumed.

“The committee on revamping ageing equipment is also in place. The Federal Government has increased the budget allocation to the Ministry of Power and its agencies to ensure increased infrastructure investment.

“The minister continues to ensure a conducive environment for private sector participation, as this is the only way to provide the capital required for infrastructure improvements in the power sector,” he stated.

He added, “If you look at the situation when the current administration took over, the generation was just about 4,000 megawatts. However, within a year, about 1,000 megawatts were added. By November 27, we again reached a target of 5,231 megawatts. Indeed, a promise of 6,000 megawatts was made, and with what we were doing, we felt it was achievable. Unfortunately, the work of vandals set us back a bit. We are not resting on our oars to ensure additional supply to the grid.”

As of November 2024, the Transmission Company of Nigeria stated that it had spent N8.8bn to repair and restore 128 vandalised transmission towers across the country.