- Nigeria’s power subsidy is projected to reach N2.4 trillion by 2024, with challenges like ageing infrastructure and vandalism impacting the sector.
- The government is working to address these issues through reforms, while Nigeria Bulk Electricity Trading Plc (NBET) continues to support the energy market with N8 trillion disbursed since 2015.
Nigeria’s power subsidy is projected to reach N2.4 trillion by 2024 as the sector struggles with ageing infrastructure and rising challenges. Minister of Power Adebayo Adelabu expressed concern over the financial strain on the industry, highlighting that recent increases in vandalism have cost the Transmission Company of Nigeria (TCN) approximately N10 billion to repair damaged infrastructure.
These figures were shared at PwC’s annual Power and Utilities Roundtable, which focused on “Reigniting Hope in Nigeria’s Electric Power Sector.” Adelabu, represented by his Chief Technical Adviser, Adedayo Olowoniyi, discussed the government’s efforts to restore trust and drive innovation in the sector. He emphasised that energy is more than a commodity, underscoring the administration’s Renewed Hope Agenda under President Bola Tinubu.
Despite progress in setting the sector on a growth path, Adelabu noted that ageing infrastructure and widespread vandalism remain significant challenges. He revealed that TCN has had to redirect capital, which could have been used to expand the grid and fix vandalised transmission towers. “In the last six months, TCN has spent nearly N10 billion on repairs instead of completing new projects or expanding the network,” he said.
Dr Yusuf Alli, Commissioner for Planning, Research, and Strategy at the Nigerian Electricity Regulatory Commission (NERC), projected the subsidy for 2024 would hit N2.4 trillion. He explained that while tariff adjustments had initially reduced the subsidy, the macroeconomic environment had worsened, leading to increased financial gaps. Through the Ministry of Finance, the government faces the challenge of paying the generating companies the total amount they are owed.
Meanwhile, Johnson Akinnawo, Acting MD/CEO of Nigeria Bulk Electricity Trading Plc (NBET), revealed that the company had disbursed N8 trillion since 2015 and would continue its role as an off-taker, supporting government policies and pushing for bilateral energy trading. He also noted NBET’s plans to evolve into an energy exchange to support market stability and discipline.
In discussions on the role of state governments, Deolu Ijose, MD of Benin Electricity Distribution Company, called for improved capacity building for state regulatory staff to ensure a better understanding of frameworks and the complexities of the energy market. He also emphasised the need to consider cost variations in the sector carefully.