Electricity: FG pays 45% of GenCos’ invoices

• Published On: 19 January 2025 at 14:54

Chief Adebayo Adelabu, Minister of Power, announced that the Federal Government has settled 45% of the invoices submitted by Nigerian electricity-generating companies.

This payment is expected to alleviate the financial difficulties faced by the GenCos, thereby contributing to the overall performance and stability of the country's power sector.

Adelabu made this statement during the inauguration of a new power transformer at the 132/33KV transmission substation in Isolo, Lagos.

He stated, "Since our administration took office, we have paid between 40 and 45 percent of the energy invoices for GenCos." This figure fell to 38% last year due to an increase in the amount of energy supplied. The remaining balance is covered by government subsidies due to the tariff shortfall.

"We once owed GenCos over N1.3 trillion, but we paid them N220 billion a few months ago. We are committed to improving these payments. The government will continue to seek funds to pay the GenCos, and we are confident that a significant portion of their debts will be settled this year.

He went on to say, "As we migrate more customers to the Band A segment, the tariff rates paid will generate revenue for the GenCos." In 2024, the cost-reflective tariff will help reduce the expected government subsidy from N3.9 trillion to around N2.4 trillion. The reduction was made possible by a 15% increase in customer bills.

"I am pleased that we are commissioning this project today because of the positive impact it will have on our energy access and reliability, but I received word from my office in Abuja a few minutes ago that the Katampe central area 132kva lines 1 and 2, which were underground transmission cables, were vandalized this morning.

"This has put the entire central area of the FCT, Abuja, including Maitama and my own office, Garki, in darkness. The issue of vandalism is one that we must all address, as it will continue to drag the country backwards even as we work to stabilize the country's energy transmission and distribution."

Adelabu urged local communities to assist in protecting power infrastructure, emphasizing that "we need to support the government to overcome the major challenge of vandalism, as this act is detrimental to national growth."

"The grid collapse that occurred last year was primarily caused by generation shortfalls and vandalism." Despite these challenges, transmission has continued to improve access and reliability; additionally, more new equipment and hundreds of transformers have been added to the grid."

Engr. Sule Abdulaziz, Managing Director/CEO of Transmission Company of Nigeria (TCN), stated that the inauguration of the 110MVA power transformer is part of the service level agreement.

""It demonstrates TCN's unwavering commitment to strengthening Nigeria's transmission network despite numerous challenges. Notably, this is TCN's first service level agreement transformer project that has been completed and energized, bringing us closer to realizing a robust and sustainable grid.

"The 110MVA power transformer was successfully energized on December 20th, 2024, adding 88 megawatts to the Isolo substation capacity, bringing it to a total of 184 megawatts. This will significantly improve the substation's ability to provide better electricity service to the Ikeja and Eko distribution companies.

"In 2024, TCN installed and energized over 42 power transformers in several TCN substations across the country. We therefore urge everyone to join TCN in the fight against power installation vandalism. If vandals do not destroy existing infrastructure, our progress toward a robust grid will be significantly accelerated."

Mrs. Folate Soetan, Chief Executive Officer of Ikeja Electric, stated that the inauguration of the power transformer will help increase the capacity to handle more loads while also improving the infrastructure.

She explained, "We are going to radiate a feeder that will draw energy from this specific power transformer. I'm excited about this because it means our customers will have more energy."