Tag: Electricity subsidy

…says DisCos still weak despite Band A tariff

The Minister of Power Chief Adebayo Adelabu has again cried out over the unsustainability of the Federal Government payment of electricity subsidy, noting it is now rising to N200 billion monthly.

According to him, owing to subsidy backlog, the government is now indebted to the electricity Generation Companies (GenCos) to the tone of N4 trillion, including the N1.94 trillion for 2024 alone.

He insisted that retaining the current tariffs is unsustainable as it is draining the public funds that are needed to upgrade infrastructure.

Adelabu made this known at the weekend while speaking at a two-day retreat organized by the Senate Committee on Power.

The press statement his Strategic Communication and Media Relations, Mr

 Bolaji Tunji issued from Abuja quoted him as saying, “The sector also faces a ₦4 trillion subsidy backlog owed to generation companies, including ₦1.94 trillion for 2024 alone. With monthly subsidy shortfalls now hitting ₦200 billion, the Minister warned that maintaining current tariffs is “unsustainable,” straining public funds needed for infrastructure upgrades.”

Adelabu added that “To salvage the sector, we will soon embark on restructuring underperforming DisCos and tightening enforcement of performance benchmarks.

However, without urgent capital injection into distribution networks, gains in generation—including a historic 6,003MW output in March 2025—and transmission upgrades, such as 61 new transformers deployed in 2024, will fail to translate to reliable household supply”. 

Adelabu spoke on the persistent crisis threatening to derail progress In the sector which is chronic underinvestment in distribution infrastructure, which continues to cripple service delivery nationwide in spite of landmark reforms in the electricity sector.

The Minister revealed glaring disparities in distribution company (DisCo) performance, with aging networks, rampant electricity theft, and poor investment deepening reliance on unsustainable subsidies and leaving millions in darkness. 

“ We need to get tough with the DisCos, as they can easily frustrate all the gains we have made. They have disappointed us in performance expectations. Whatever we do in generation does not mean anything to consumers if it is frustrated at the distribution points”.

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He noted that in 2003 restructuring of the sector, the DisCos were supposed to have technical partners, but a lot of them showed partnership with foreign companies for that purpose which lasted for about three months, immediately they took over, those companies left. So we need utility companies that can invest in the sector to improve infrastructure, improve service”, adding that, “a lot of them went to the banks to take loans to buy the assets, after taking over, instead of providing infrastructure they are taking out the money to pay the loans”.

According to the Minister, despite tariff adjustments that boosted market liquidity by 70 percent—raising sector revenue from ₦1 trillion in 2023 to ₦1.7 trillion in 2024—the distribution segment remains the weakest link.

“In the fourth quarter of 2024, DisCos in the North remitted just ₦124.4 billion (30 percent) of their ₦408.86 billion invoice, with Abuja DisCo accounting for 85 percent of Northern payments. Southern DisCos fared slightly better, remitting ₦254.6 billion (67 percent), though 70 percent of this came from Lagos DisCos alone. These discrepancies are due largely to crumbling infrastructure outside economic hubs, where underinvestment has left networks dilapidated”.

Adelabu noted that the metering gap, a key driver of revenue loss and consumer distrust, underscores systemic neglect adding that the government has launched a ₦700 billion Presidential Metering Initiative (PMI) and a World Bank-backed program targeting 4.3 million meters by 2025, 75,000 units were deployed in April 2024 while additional 200, 000 is expected in May. “Closing this gap is fundamental to fair billing and financial sustainability,” the Minister acknowledged, “but we are not there yet due to underinvestment and operational inefficiencies.” 

The Minister highlighted plans to attract private investment into grid infrastructure and regionalize transmission networks to reduce failure risks noting that the 70 percent remittance by the two DisCos in Lagos reflects better infrastructure than what obtains in the northern networks.

The Minister also spoke of plans to boost power supply in the Northern part of the country. “ We are looking at developing Makurdi hydropower project which is about 1000 megawatts. We also want to revitalize Kaduna thermal plants which has been abandoned for the past five years, it is a 215 megawatts capacity plant and is presently at about 87 percent completion. Efforts are on presently to restore this power plant”

Adelabu said the State government has expressed interest in taking over the Katsina windfarm with an installed capacity of 10 megawatts. “The State government has expressed desire to take this up with some private investors and we have commissioned a feasibility study to concession the farm which had been abandoned for a while”.

The minister however called on the National Assembly to enact stricter legislation aimed at safeguarding Nigeria’s power infrastructure from acts of vandalism. Emphasizing the need for enhanced legal measures, Adelabu stressed that robust laws are critical to deterring the destruction of vital energy assets and ensuring the stability of the nation’s electricity supply. 

 According to him, vandalism should not be treated as a civil offence but a criminal issue adding that power theft , nonpayment of bills by consumers, illegal connections are critical factors that need to be tackled.

Adelabu acknowledged that in spite of the challenges, the grid has been stabilized as the country has not witnessed any grid collapse since the beginning of the year.

” The level of stability on our grid today is not by accident but hard work and expenditure. In 2024, TCN installed 61 new transformers by either replacing aged one or building new one. Also in 2025, within the first four months, TCN installed about 13 new transformers and there are high-capacity transformers ranging from 10 megawatts to 300 megawatts. Put together, they run into hundreds of million dollars to install and these are what our people still go out to vandalize.

“Our towers are toppled by saboteurs and vandals, we have illegal connections, and people tampering with meters”. The Minister urged appropriate legislation and public vigilance to protect “national assets that belong to every Nigerian.

“We need more stringent legislation to tackle this problem”, he said.

The Minister also made a case for the Transmission Company of Nigeria (TCN) in appropriation adding that the agency does not have enough money to fund its operations. “ They are short of funds, they operate solely on their Internally Generated Revenue(IGR) which has been nose diving over the years . What they get monthly cannot even pay their salary not to talk of maintaining ageing infrastructure, expanding transmission networks. There should be a way to accommodate TCN in appropriation”, he said.

The federal government has approved a 50% electricity subsidy for all public hospitals and public tertiary institutions; including universities, polytechnics, and colleges of education across the country.

The Minister of State for Health, Dr. Tunji Alausa disclosed this at the National Ear Care Centre, Kaduna, during the commissioning of several completed projects on Thursday.

He said, that very soon, hospitals and the public education system will be enjoying significant reductions in prices as the implementation plans and strategies were being developed by the Honourable Minister of Energy.

According to the Health Minister, “President Bola Ahmed Tinubu has magnanimously approved 50 percent electricity subsidy to all public hospitals and education system; universities, polytechnic and colleges of educations. It has been approved.

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“The process of implementation is being developed by the Honourable Minister of Energy. Very soon, hospitals and public education systems will be enjoying significant reductions in the prices they are paying currently for their energy tariff.

Speaking on the projects commissioned at the Hospital, Dr Alausa noted that, the developments align with President Bola Ahmed Tinubu’s agenda to provide affordable and comprehensive healthcare to Nigerians.

He said, the newly commissioned facilities, including an auditorium, student hostel, oxygen plant, molecular laboratory, and more, are crucial steps toward enhancing healthcare service delivery and medical training in the country.

Dr. Olatunji also addressed the ongoing challenges in the healthcare sector, particularly the impact of the “Japa” syndrome on the availability of medical professionals.

He announced efforts to increase training quotas and improve remuneration for healthcare workers to encourage them to remain in the country.

The minister further outlined the Federal Ministry of Health’s plans to implement a national electronic medical system to revolutionize patient care and data management.

“This is impressive. This is what we are doing in the health sector. We need to talk more about the positive things we are doing in this country. President Ahmed Bola Tinubu is committed to revamping all the sectors of our economy, especially in the health sector where he is giving us all we want.

“As you can see, it’s public information, in the 2024 budget we have the highest budgetary allocation to health eve in the history of the country. We are commissioning projects like this. We are here today, at the ear care centre – one of the only hospitals that care for Ear, Nose, and Throat ailments. We went to the operating theatre, they have a dissecting microscope where you get minimal surgery done. This is what you get anywhere in the world. We have the services here.

“We need to celebrate our healthcare professionals for their hard work, and dedication to serving our citizens. We have also commissioned a student hostel. We care for our students as well.

“The government is doing everything to train our citizens and also to whom much is given, much is expected. We are training a lot of these students for free for medical, nursing, and medical laboratory scientists. The government is investing on them heavily in them. Helping them to build their net ability for them.

“We need to give back to the country. It is a free world, we can’t say you can’t migrate abroad but then we need to also give back to our country. This president is committed to expanding and improving the human capacity index and that’s what he’s doing in every sector of the economy.

“Our country is in the right direction and I want to implore the citizens to be patient with this president. He knows what he is doing. Every promise he made to Nigerians, he will fulfill them and he’s already fulfilling a lot of his promises. Our country is in the right trajectory now and I want to implore fellow citizens to be positive about our country. This is the only country we have and this negativity must stop,” he said.

In her remarks, Kaduna State Deputy Governor, Dr. Hadiza Sabuwa Balarabe, representing Governor Uba Sani, commended the leadership of the National Ear Care Centre for its transformative efforts.

She assured the Centre of continued support from the Kaduna State Government to maintain its status as a leading institution in ENT care and research.

“Together, we can work towards ensuring that all Nigerians have access to high-quality healthcare services and that the National Ear Care Centre remains a beacon of excellence in the field of ENT”, she said.

Earlier, the Centre’s Medical Director, Dr. Mustapha Yaro, outlined the newly completed projects, which are part of a broader effort to enhance healthcare infrastructure and services. 

He also said among the key projects unveiled were a 200-capacity auditorium and a one-storey student hostel for the School of Post Basic ORL Nursing Others are a newly constructed oxygen plant, and a state-of-the-art molecular laboratory accredited by the Centre for Disease Control for managing infectious diseases like diphtheria.

The Emir of Zazzau, Ahmad Bamali, also expressed his appreciation for the government’s commitment to improving healthcare His royal father called on others to emulate these efforts for general health improvements.

Minister of Information and National Orientation, Mohammed Idris, has said that the over N1 trillion that would be saved from the withdrawal of electricity subsidy will be reinvested into improving power supply and the provision of social services in the country.

Idris stated this in Kaduna yesterday  as a guest of the popular Hausa audience participatory programme of Radio Nigeria Kaduna called “Hannu Da Yawa.”

He said the disproportionate amount of electricity subsidy, approximately 40%, is benefiting only about 15% of the electricity consumer population, comprising affluent individuals and industrial clusters, who enjoy about 20 hours of electricity.

“It is essential to emphasise that the funds to be saved from the withdrawal of electricity subsidy will be reinvested in enhancing power supply across the country and improving other vital social services such as health and education,” he said.

Idris emphasized that 85% of the population who fall under the different categorizations of the new electricity supply regime still enjoy the subsidy.

The Minister said the new Electricity Act, signed by President Tinubu, has strengthened the governance structure of the Nigerian Electricity Regulatory Commission (NERC), and empowers the Commission to place severe sanctions on electricity distribution companies for infractions relating to billings and supply of electricity to consumers.

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While speaking on the post-fuel subsidy intervention programmes, Idris said the supply of N100 billion worth of CNG buses is still on track as the specification of the buses is not bought off the shelf.

The Minister said the government would soon launch CNG conversion centres across the country to encourage Nigerians to convert their vehicles from fuel consumption to CNG to reduce the cost of transportation.

Idris also stated that the committee set up by the President to review the operational mechanism of the National Social Investment Programme has submitted its report to pave the way for the resumption of the programmes, which will be providing N25,000 Conditional Cash Transfers to 15 million poor and vulnerable households for three months among other interventions.

The Minister used the platform to dispel the notion in some quarters that the Tinubu administration is out to shortchange the Northern part of the country, stressing that the Federal Government would continue to invest funds in the development of projects in the north.