Oredola Adeola
Adebayo Adelabu, Minister of Power has revealed that power generation companies (GenCos) are losing almost half of their supplied electricity due to theft, inefficiencies in billing and collection processes, resulting in a staggering NGN1.6 trillion shortfall in wholesale electricity tariffs.
Adelabu made this known on the sideline of the recent meeting in Abuja, with the heads of all the agencies under the Federal Ministry of Power in attendance.
According to him, the recent power disruptions across Nigeria stem from the inability of major players in the Nigerian Electricity Supply Industry (NESI) to settle old and current debts, causing a broken system where Gas Companies (GasCo) withhold gas supply from GenCOs.
He said, “One major challenge is the non-cost reflective tariff, hindering DISCOs from meeting revenue targets and investing in reducing technical, commercial, and collection losses (ATC&C).
“Currently, there’s a significant NGN1.6 trillion shortfall in wholesale tariffs, with an industry average ATC&C loss of 48% indicating that nearly half of the electricity generated is not paid for due to technical issues, theft, and inefficiencies in billing and collection processes,” the Minister said.
Adelabu further emphasised that the Ministry of Power, in collaboration with the Ministry of Finance, Budget and Economic Planning, and the office of the Special Adviser on Energy to the President, are actively addressing the substantial outstanding debts owed to both GenCos and gas suppliers through a combination of cash injection and guaranteed debt instruments.
He said, “Additionally, we’re partnering with the Minister of State for Petroleum Resources (Gas) to establish firm gas supply contracts for GenCos, aiming to stabilize pricing in local currency for gas-to-power domestic supply.
The Power Minister further revealed that investments in upgrading aging infrastructure, expanding capacity, and deploying advanced technologies through the Siemens-backed Presidential Power Initiative (PPI) are underway.
He emphasised the commitment of his Ministry to accelerating key power initiatives like the Siemens Project, aimed at enhancing transmission capacity.
Adelabu said, “Several power generation projects, including the completion of the 700MW Zungeru Hydro Electricity Power Plant in Niger State, are progressing. Financing arrangements for the 40MW Kashimbila Hydro Power Plant in Taraba state are being finalized. We’re reviving 26 small and medium-sized hydro plants with solar hybridization and completing a 20MW Wind/Solar hybrid power plant in Katsina state.
“Efforts are also focused on increasing the operational capacity of NIPP power plants under the Niger Delta Power Holding Company to at least 50%,” he said.
He also revealed that discussions for Engineering Procurement Construction and Financing (EPC+F) super grid projects with two Chinese firms are ongoing, which according to him is crucial for providing failover and backup capacity to the National grid.
Adelabu said, “Initiatives to modernize and strengthen existing transmission infrastructure, including upgrading substations and power lines, are in progress.
“Projects for reconductoring aging transmission power lines are being initiated for enhanced efficiency and reliability.
“Intervention projects funded by multilateral development partners, such as the World Bank, AfDB, and JICA, are expedited to address critical transmission challenges.
The Power Minister further emphasised that fair and competitive regulation efforts have resulted in significant fines for non-compliant DISCOs and refunds to over-billed customers, bolstering reliability and resilience in our electricity supply infrastructure.
He therefore made a commitment to improving communication and navigating challenges together to deliver reliable and accessible electricity to every corner of the nation.
