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Nigeria’s federal government has taken a significant step towards resolving the financial challenges faced by power generation companies (Gencos) and gas suppliers, approving the payment of the first tranche of the N1.3 trillion gas supply debts. The Minister of Power, Chief Adebayo Adelabu, announced the initiation of the payment process, highlighting the government’s commitment to addressing the longstanding issue.

The payment, amounting to about N130 billion, marks the beginning of a comprehensive liquidation plan approved by President Bola Tinubu. Adelabu emphasized that the government aims to stabilize the operations of distribution companies (Discos), particularly by unbundling their activities along state boundaries to enhance efficiency.

Furthermore, Adelabu addressed concerns regarding recent electricity tariff adjustments, stating that the tariff review was intended to alleviate the financial burden on consumers, particularly manufacturers. He asserted that the recent tariff adjustments have contributed to reducing production costs for manufacturers by up to 40%, contrary to misconceptions about increased costs.

Amid discussions on the nation’s energy sector, stakeholders emphasized the need for robust policy frameworks and strategic investments to ensure sustainable energy access. The Nigerian Electricity Regulatory Commission (NERC) acknowledged the financial challenges facing Discos, highlighting the urgent need for structural reforms and capital infusion to enhance operational efficiency.

On the international front, the African Development Bank (AfDB) reaffirmed its commitment to supporting Nigeria’s power sector reforms, with plans to allocate over $1 billion towards various projects. AfDB’s Vice President for Power, Energy, Climate, and Green Growth emphasized the importance of collaboration and innovative approaches to address Nigeria’s energy access deficit and promote sustainable development.

As Nigeria continues its journey towards achieving universal energy access, stakeholders underscored the significance of leveraging new technologies and strategic partnerships to accelerate progress and foster economic growth.