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By Stella Odueme
The Federal Government has approved a ₦3.3 trillion intervention plan to settle verified legacy debts owed to electricity generation companies, with ₦1.23 trillion already raised under the initiative to ease financial pressures in the power sector.
The Minister of Power, Chief Joseph Tegbe, disclosed this on Thursday in Abuja while delivering his opening address at the sixth annual conference of the Power Correspondents Association of Nigeria (PCAN).
The conference, held Abuja, had as its theme, “$1 Trillion Economy: Nigeria’s Roadmap to Reliable and Affordable Power Supply.”
Tegbe, who spoke through his Special Adviser on Administration and Projects, Martins Olajide, said the intervention was part of President Bola Tinubu's efforts to address longstanding structural, financial and infrastructure challenges that had constrained the growth of Nigeria's electricity industry.
According to him, the President is committed to building a productive, resilient and investment-driven $1 trillion economy, an ambition that requires reliable, affordable and commercially sustainable electricity.
He stressed that Nigeria's economic transformation could not depend on consumption alone but must be driven by increased production, industrial expansion and private sector investment.
The minister noted that electricity remained central to this ambition because reliable power supply would enable businesses to increase production, reduce operating costs and build confidence for further investments.
He said the administration had demonstrated the political will to confront longstanding challenges in the power sector, particularly the financial constraints affecting electricity generation companies.
Tegbe explained that settling verified legacy debts would ease financial pressures on generating companies, improve their capacity to meet gas payment obligations and support the maintenance of their power plants.
He emphasised that the government's intervention was aimed at strengthening the financial sustainability of the electricity market and creating an enabling environment for improved power generation and supply.
The minister's remarks came against the backdrop of concerns over inadequate investment, liquidity challenges, gas supply constraints and infrastructure deficits across the electricity value chain.
At the same conference, the Managing Director and Chief Executive Officer of FGN Power Company Limited, Mr. Kenny Anuwe, said the Federal Government was seeking to attract an additional $19 billion in investments into the electricity sector through alternative financing arrangements.
Anuwe argued that the existing funding structure, under which government provides more than 95 per cent of new infrastructure investments, was unsustainable and inconsistent with the objectives of electricity sector privatisation.
He disclosed that FGN Power Company was targeting a $2.3 billion project, comprising $1.3 billion expected from Europe and $1 billion from China.
He also revealed plans to strengthen the company's capital base to at least $1 billion, noting that the Africa Finance Corporation had indicated its readiness to match the amount.
According to him, the company is also working to mobilise an additional $18 billion from other financiers for investments across the electricity sector.
Anuwe advocated a shift from heavy dependence on sovereign guarantees and government counterpart funding to alternative financing models, including viability gap financing and blended finance, to attract institutional investors and private capital.
Earlier, the Chairman of PCAN, Mr. Obas Esiedesa, said the conference was designed to bring together policymakers, regulators, electricity operators, investors, industry experts and journalists to examine challenges facing the sector and develop practical solutions.
He identified the recurring decline in electricity generation between November and March as a major concern, attributing it to reduced water inflows into hydroelectric power stations and gas supply constraints affecting thermal plants.
Esiedesa called for stronger collaboration among government, regulators, generation companies and gas suppliers to ensure adequate gas availability, particularly during periods of reduced hydropower generation.
He also identified inadequate transmission and distribution infrastructure, liquidity challenges, regulatory uncertainties and investment gaps as issues requiring urgent attention.
The PCAN chairman said the decentralisation of the electricity market under the Electricity Act 2023 offered opportunities for increased investment, innovation and improved service delivery, but stressed the need for effective coordination and clear regulatory frameworks.
He urged participants to go beyond identifying challenges and develop practical recommendations capable of informing policies, attracting investments and improving electricity supply across the country.