President Bola Tinubu approves the gradual settlement of power sector debts, totaling over N3.3 trillion, a significant move aimed at addressing Nigeria’s enduring power challenges, This strategic initiative poised to alleviate financial burdens plaguing the sector heralds a potential solution to persistent power outages.
Debt Settlement Plan Unveiled
The Federal Government owes power generating companies (Gencos) a substantial portion of the accumulated debt, estimated at N1.3 trillion. To address this, the government plans to disburse funds through cash injections and promissory notes. Additionally, approximately $1.3 billion owed to gas companies will be settled through cash payments and future royalties, representing a multi-faceted approach to debt resolution.
Progressive Payments Initiated
Recent actions by the Federal Government signal progress in tackling the debt issue. Cash payments toward the N1.3 trillion debt owed to Gencos have already commenced. Plans are underway to utilize promissory notes for the remaining balance, with a timeframe ranging from two to five years, reflecting a commitment to resolving financial obligations within the power sector.
Minister’s Disclosures
Chief Adebayo Adelabu, the Minister of Power, disclosed these developments at the 8th Africa Energy Marketplace in Abuja. Emphasis placed on collaborative efforts among stakeholders to promote sustainable energy policies, regulations, and investments. Highlighting the necessity for policy coordination and regulatory enhancements within the power sector for effective implementation. The focus underscores the pivotal role of cooperation in shaping a more sustainable and efficient energy landscape.
Immediate Actions Undertaken
Tinubu’s order releases N130 billion from the Gas Stabilisation Fund to pay off a segment of Gencos’ debt. This swift move demonstrates a proactive stance in tackling financial hurdles, guaranteeing steady gas supply for power. The action aims to stabilize the sector financially, ensuring uninterrupted gas flow for electricity generation purposes. It signifies a step toward resolving longstanding financial issues within the power industry, fostering stability and reliability.
Path Forward
In the future, the government plans to encourage more investments in power generation via cash injections and promissory notes. This strategy harmonizes with wider endeavors to improve energy access, reliability, and financial stability in Nigeria’s power domain. It promises a brighter outlook for a more dependable and resilient electricity supply system down the line. These efforts aim to address longstanding challenges and pave the way for a more sustainable energy future.
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