Dare Babalola
President Bola Tinubu has established a committee to settle the outstanding debts owed to power generation and distribution companies in Nigeria, aiming to address the sector’s financial challenges and improve power supply.
The Federal Government owes electricity generation companies (GenCos) and distribution companies (DisCos) N6 trillion in electricity subsidies.
The Permanent Secretary of the Federal Ministry of Power, Mahmuda Mamman, on Monday, made this revelation in a goodwill message at the 10th anniversary celebration of the Association of Power Generating Companies (APGC) in Abuja, themed “A Decade of Powering Progress, Driving Nigeria’s Energy Transformation”.
The Permanent Secretary, represented by Director Evangeline Olumoroti Babalola, stated that the committee’s mandate includes clearing outstanding debts and implementing sustainable payment mechanisms to prevent future debt accumulation.
“In recognition of the critical importance of resolving this issue for the sustainability of our power sector, Mr. President has constituted a committee specifically mandated to address the payment of outstanding debts owed to the GenCos.
“This committee has been charged with the responsibility of developing a comprehensive framework for clearing these debts and establishing sustainable payment mechanisms that will prevent such accumulations in the future,” the Permanent Secretary said.
The Nigerian power sector has been plagued by financial challenges, with the Federal Government’s debt to GenCos and DisCos hindering the industry’s growth. The sector’s instability has resulted in frequent power outages, affecting businesses and households nationwide. The government’s efforts to address the issue have been ongoing, with various initiatives aimed at improving power supply and reducing debt.
In recent years, the Nigerian government has implemented policies to increase power generation and distribution, including the privatisation of power plants and the introduction of renewable energy sources. However, the sector still faces significant challenges, including inadequate infrastructure, poor funding, and inefficient management.
The establishment of the committee to settle outstanding debts is seen as a crucial step towards addressing the sector’s financial woes and improving power supply. The committee’s mandate to develop sustainable payment mechanisms is expected to prevent future debt accumulation and promote stability in the power sector.
