If govt wants to subsidize electricity then it should pay, Power Minister clarifies stance on subsidy

The Ministry of Power, on Sunday, issued a clarification regarding comments attributed to Minister Adebayo Adelabu on power sector subsidies.

A statement by Special Adviser, Strategic Communication and Media Relations, Bolaji Tunji, emphasized that the Minister did not advocate for subsidy removal but rather stressed the need for payment mechanisms to accompany any existing subsidies.

This clarification comes amidst ongoing debates about the future of power sector subsidies and their impact on the industry’s financial sustainability.

The Ministry’s communication also addressed the issue of outstanding debts owed to electricity generation companies (GENCOs) by the Nigerian Bulk Electricity Trading Company (NBET). Recognizing the “liquidity challenge” within the sector, the statement outlined efforts to “revalidate the debt and determine a fair resolution.” This suggests an active approach towards resolving the financial strain on GENCOs, potentially paving the way for improved investment and generation capacity.

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Acknowledging the “certain concessions expected of government” to achieve sector stability, the Ministry expressed its willingness to collaborate with stakeholders. This collaborative approach could involve addressing concerns raised by GENCOs and other industry players, ultimately aiming to create a more sustainable and efficient power sector.

The statement reads, “What he said was that if the government was subsidising power, it should be backed up with payment.

“There is a need to correct the erroneous impression going around quoting the Minister of Power, Adebayo Adelabu as advocating removal of subsidy in the power sector.

“The meeting also discussed issues of indebtedness to GENCOs by the Nigeria Bulk Electricity Trading Company (NBET).

“We are aware that the sector has liquidity challenge, but we need to have a minimum threshold, we are working on revalidating the debt and determining a fair resolution.

“We know that there are certain concessions expected of government before this could be achieved and we are willing to work on this to stabilize the power sector.”

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