Investors Will Not Come If We Continue To Pay Electricity Subsidy For Nigerians – Says Minister Of Power
The Minister of Power, Adebayo Adelabu has claimed that the country needs to invest the sum of 10 billion dollars yearly, to revive the power sector for the next 10 years.
The minister revealed this on Monday, at a one-day investigative hearing on halting the electricity tariff increase by the Nigerian Electricity Regulatory Commission (NERC) organised by the Senate Committee on Power in Abuja.
He was quoted saying: “For this sector to be revived, government needs to spend nothing less than 10 billion dollars annually in the next 10 years.
”This is because of the Infrastructure requirement for the stability of the sector, but government can not afford that.
“And so we must make this sector attractive to investors and to lenders.
“So for us to attract investors,and investment, we must make the sector attractive, and the only way it can be made attractive is that there must be commercial pricing,” he said.
Adelabu added, “If the value is still at N66 and government is not paying subsidy, the investors will not come.
“But now that we have increased tariff for a Band, there are interests being shown by investors.”
The minister stated that the main difficulty in the sector was a lack of liquidity, and that the sector had been operating under a subsidised tariff regime due to the lack of a cost-reflective tariff.
He stated that the subsidy had not been provided over the years due to large liabilities owed to the Generating Companies (GenCos) and Gas Companies.
Adelabu explained that the government’s failure to pay the unpaid N2.9 trillion subsidy was owing to limited resources, necessitating the development of strategies to sustain the industry.
He urged lawmakers to assist the process of repaying debts owed operators along the value chain of generation, transmission, and distribution.
He continued: “The increase is based on supply, saying that any customer that does not receive 20 hours power supply will not be made to pay the new tariff.”
SaharaReporters had reported how President Bola Tinubu-led Nigerian government had approved N225 ($0.15) per kilowatt-hour tariff increment for Band A electricity consumers in the country.
The Vice Chairman of the Nigerian Electricity Regulatory Commission (NERC), Musliu Oseni, who made this known at a press briefing in Abuja said the increase would see the customers paying N225 kilowatt per hour from the current N66.
According to Oseni, customers in Band A who are those who enjoy 20 hours of electricity supply daily represent 15 percent of the 12million electricity customers in Nigeria.
