Minister of Power Calls for $10 Billion Annual Investment to Revive Nigerian Power Sector
During a significant address in Abuja on Monday, Minister of Power, Mr. Adebayo Adelabu, underscored the urgent need for an annual investment of $10 billion over the next decade to rejuvenate Nigeria’s struggling power sector and address its liquidity challenges. However, Adelabu acknowledged the current impracticality of such a substantial allocation within the national budget.
Adelabu’s remarks came at a one-day investigative hearing organized by the Senate Committee on Power to examine the suspension of the proposed new electricity tariff increase by the Nigerian Electricity Regulatory Commission (NERC). He emphasized the necessity of attracting investors to ensure the sector’s sustainability, highlighting the importance of commercial pricing to make the power market more appealing to potential investors and lenders.
The minister also addressed the pressing issue of liquidity in the sector, attributing it in part to the failure to implement a cost-reflective tariff. Adelabu urged lawmakers to collaborate in addressing outstanding debts owed to operators across the power generation, transmission, and distribution chain. He clarified that the tariff increase was contingent on the availability of power supply, with customers receiving less than 20 hours of electricity exempted from the new tariff.
Adelabu outlined ongoing efforts to enhance power supply, including investments in hydroelectric power such as the construction of a 700-megawatt power plant in Zungeru and the Kashimbila Hydroelectric power plant. Additionally, investments in 26 small hydropower dams aim to bolster electricity production nationwide.
Despite these initiatives, committee members expressed dissatisfaction with the performance of power sector operators. Senator Ola Ashiru highlighted inefficiencies across the generation, transmission, and distribution chain, emphasizing the need to protect low-income Nigerians and consider reversing the tariff increase.
Senator Solomon Larlong emphasized the importance of adequate consultation prior to implementing tariff adjustments, while Senator Adamu Aliero called for a complete rollback of the tariff hike, citing public discontent. Committee Chairman Senator Eyinnaya Abaribe urged stakeholders to focus on identifying solutions to ensure liquidity in the sector.
During the hearing, stakeholders including the Nigerian Electricity Regulatory Commission and industry associations made presentations. Concerns were also raised about the non-appearance of a company involved in providing prepaid meters, which allegedly received N32 billion over 20 years without fulfilling its agreement.
Overall, the hearing provided a platform for robust discussion and engagement on critical issues affecting the power sector, with a focus on finding solutions to ensure sustainable electricity provision in Nigeria.
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