July 09, (THEWILL) — The federal government has disclosed that it is actively developing a plan to shift the power sector to a fully cost-reflective tariff regime.
A statement signed by Bolaji Tunji, the Media aid to the Minister of power, said Adebayo Adelabu disclosed this on Tuesday, at the Mission 300 stakeholders’ engagement meeting in Abuja.
Adelabu said the move is part of broader reforms aimed at restoring sustainability and bankability to the power sector, adding that the decision was necessary for national economic growth and development.
“Currently, there’s a huge outstanding debt to the Power Generation companies in the form of unpaid government subsidies, which stands at about N4 trillion as of December 2024. The Federal Government is already working out modalities to defray this obligation and to ensure that further obligations are not accrued going forward, the government is working on a plan to transition the sector to a fully cost-reflective regime while implementing targeted subsidies for the economically vulnerable citizens in the country”, he said.
The minister also outlined key priorities under the government’s power reform agenda. These include recovering idle generation capacities, expanding the country’s energy mix to enhance energy security, and integrating cheaper, cleaner energy sources into the national grid.
Adelabu also listed other focus areas such as resolving market liquidity challenges, expanding transmission infrastructure, and stabilising the national grid to prevent recurring grid disturbances and collapses. He noted that the ministry is also prioritising rural electrification and energy transition initiatives, aimed at increasing access to reliable power in unserved and underserved communities through renewable energy deployment.
He said the stakeholders’ meeting provided a platform for aligning strategies and fostering partnerships needed to convert the Nigeria Energy Compact into tangible outcomes. He called on development partners, the private sector, philanthropic organisations, civil society groups, and public sector institutions to support the initiative.
The Minister of Finance, Wale Edun, stressed the importance of the ongoing power sector reforms, describing them as vital to unlocking Nigeria’s economic potential and driving job creation.
Speaking at the event via Zoom from Brazil, Edun added that the reforms had already led to more than a 40 percent increase in power distribution in the first quarter of 2025.
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