The Minister of Power, Adebayo Adelabu, has said Nigeria must begin to move towards a cost-effective tariff model because the Federal Government cannot continue to subsidise electricity as the country is currently owing Generating Companies (GenCos) N1.3 trillion and $1.3 billion is being owed to gas companies.
Adelabu made this known during a press conference in Abuja today. He said only N450 billion was budgeted for subsidy this year, but the ministry needs over N2 trillion for subsidy.
He revealed that state governments will now be allowed to generate power independently to supply to their states.
The Minister added that the Transmission Company of Nigeria has over 100 abandoned projects due to variations in contract figures as a result of the fluctuations of the forex.
Also, he said the constant collapse of the power grid was caused by the shortage of gas, ageing machines in the grid value chain, low capacity to evacuate generated power, and destruction of power stations in some parts of the North-East geopolitical zone of the country.
The Minister said that in the face of these daunting challenges, the Transmission Company will not award any new contracts till all projects it has awarded are completed.
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