Investors Will Not Come If We Continue Paying Electricity Subsidy: Minister Of Power, Adelabu, Defends High Tariffs Amid Allegations Of Following IMF Guidelines

Investors Will Not Come If We Continue Paying Electricity Subsidy: Minister Of Power, Adelabu, Defends High Tariffs Amid Allegations Of Following IMF Guidelines....KINDLY READ THE FULL STORY HERE▶

Written By Oshiobugie John

In a fervent defense of recent electricity tariff hikes, Minister of Power, Adebayo Adelabu, asserted that maintaining electricity subsidies would stifle investor interest in Nigeria’s power sector. He made this assertion during a one-day investigative hearing on halting the electricity tariff increase, organized by the Senate Committee on Power in Abuja.

Adelabu underscored the necessity for substantial investments, estimating a required annual expenditure of $10 billion over the next decade to rejuvenate the power sector. However, he acknowledged the financial limitations of the government in meeting such demands.

“To make the sector attractive to investors and lenders, commercial pricing is imperative,” Adelabu emphasized, stressing that subsidized tariffs would not incentivize investor participation. He argued that the recent tariff adjustments had already sparked interest among potential investors. READ THE FULL ARTICLE HERE

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Addressing the sector’s prevailing challenges, Adelabu highlighted liquidity issues and the absence of a cost-reflective tariff as primary concerns. He attributed the accumulation of unpaid subsidies to outstanding liabilities owed to Generating Companies (GenCos) and Gas Companies.

The minister disclosed that the government’s inability to settle the accrued N2.9 trillion subsidy was due to resource constraints, urging legislative intervention to address debts within the industry’s value chain.

Regarding the tariff increment, Adelabu clarified that customers receiving less than 20 hours of power supply daily would not be subjected to the revised rates, aligning with efforts to ensure fairness in billing practices.

Previously reported, the Nigerian government led by President Bola Tinubu sanctioned a tariff increment of N225 ($0.15) per kilowatt-hour for Band A electricity consumers. Musliu Oseni, Vice Chairman of the Nigerian Electricity Regulatory Commission (NERC), affirmed that this adjustment primarily affected customers enjoying 20 hours of daily electricity supply, constituting 15% of Nigeria’s 12 million electricity consumers.

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