Percy Onyeka
Over the weekend, electricity supply nationwide remained unreliable due to issues with gas supply and the financial outlook. Attempts by the federal government to enhance national grid supply were ineffective.
Only 16 of the country’s power plants were producing to the grid at 3,530.33 Mega Watts as of 3 p.m. yesterday, according to checks on national grid data provided by the Independent System Operator. Nigeria’s largest power plant, Egbin Power, was completely off the grid.
The largest generators were Shiroro Hydro (275.73MW), Kainji Hydro (415MW), and Azura-Edo IPP (420MW).
Gas providers have so far rejected government requests to expand supplies to power plants, claiming they owe the government more than $1.3 billion for previous deliveries.
The government had at the beginning of the year agreed to pay electricity subsidies of N1.6 trillion in 2024 to the Nigerian Electricity Supply Industry, NESI, but a budget provision of just N450 billion.
The Minister of Power, Chief Adebayo Adelabu last week confirmed that no payment has been made for the month of January, compounding the liquidity challenge facing the industry.
The Minister noted “The persistent liquidity issues coming from inappropriate tariff regime, poor collections and inadequate funding of government subsidies leading to huge debts owed to the transmission, generation and gas supply companies.
“This has restricted investments required for sustaining supply flow, capacity expansion and infrastructural improvements. It has also not only discouraged lending to the sector by financial institutions as the sectoral activities are not bankable, but has also made the sector unattractive to new investors”.
He added that some of the solutions being considered by the government include “settlement of existing sectoral outstanding debt obligations to the gas supply and power generation companies using partly cash payment and guaranteed debt instruments. N1.3 trillion is current debts to the GenCos and $1.3 billion legacy debts to the GenCos.
Following the drop in supply, electricity distribution companies, DisCos moved to pacify consumers, assuring them of improved services soon.
Abuja Electricity Distribution Company, AEDC, in a statement said: “We would like to inform you that we are aware of the unstable power supply experienced in recent times essentially caused by insufficient power allocation to us.
“This has constrained us to implement load curtailment directives across our franchise to manage the situation for grid stability. This will involve occasional temporary interruption of power supply to certain areas for a limited period. We understand the inconvenience this may cause and sincerely apologize for this disruption. We are working diligently to minimize the impact of these outages”.
Also, Ibadan Electricity Distribution Company, IBEDC, informed its customers that “the drop in electricity supply currently being experienced is due to generation shortfall as a result of gas shortage to the generating companies.
“We are working with stakeholders in the electricity value chain on a sustainable resolution. We sincerely apologize for the inconvenience and appeal for your understanding”, it added.
Meanwhile, the European Union has said that it will invest 37 million Euros into the power sector. It said the amount is beside 200 million grants invested in the sector since 2008.
The EU Ambassador to Nigeria, Samuela Isopi who disclosed this when he visited the Minister of Power, Chief Adebayo Adelabu, said the amount would fund small hydro power, solar for health care facilities, rural electrification with isolated and interconnected mini-grids project, and circular economy in power sector project.
In his response, Chief Adelabu identified the liquidity issue as the main problem in the sector that the government is trying its best to resolve, adding that the market will only be sustainable and run efficiently when there is a cost reflective tariff in place.
While thanking the EU for its support for the sector, he noted that the EU projects align with the Ministry’s strategy for the sector. He promised to work with the EU on their programmes especially on Small hydro and state electrification within the new act.
Techrectory with Agency Report
