By Obas Esiedesa, Abuja

The Federal Government is set to implement a cost-reflective electricity tariff as part of broader reforms aimed at addressing the persistent liquidity crisis in the power sector.

Speaking at the Mission 300 Stakeholders Engagement Meeting in Abuja on Tuesday, the Minister of Power, Chief Adebayo Adelabu, disclosed that the government is actively exploring ways to settle the ₦4 trillion debt owed to power generation companies (GenCos), largely accumulated from unpaid electricity subsidies.

Adelabu explained that the government intends to phase out blanket subsidies and replace them with targeted support for vulnerable and low-income consumers.

“Currently, there’s a huge outstanding debt to the power generation companies in the form of unpaid government subsidies which stands at about ₦4 trillion as of December 2024,” he said.

“To prevent further accrual, we are working towards a fully cost-reflective tariff regime, while providing targeted subsidies to shield economically vulnerable citizens.”

According to a statement from his office, the Minister outlined the government’s power sector reform priorities, including:

Resolving market liquidity issues

Boosting generation by recovering idle capacity and diversifying the energy mix

Expanding transmission infrastructure and stabilizing the national grid

Enhancing the distribution segment through programs like the Presidential Metering Initiative and the World Bank’s Distribution Sector Recovery Program (DISREP)

He reiterated the government’s commitment to making the power sector sustainable and bankable.

On the Mission 300 Initiative, which aims to connect 300 million unserved people in Africa to electricity by 2030, Adelabu said the estimated investment required for Nigeria’s part of the initiative is $32.8 billion, with $15.5 billion expected from the private sector.

“This stakeholders’ meeting is a platform for aligning strategies and building the partnerships necessary to translate our Energy Compact into concrete results,” he said.

He urged development partners, private sector players, philanthropists, public sector institutions, and civil society organizations to rally behind the initiative.

“Mobilizing this level of financing will demand innovation, coordination, and shared commitment,” he noted.

Chief Adelabu acknowledged the support of global development institutions, including:

The World Bank Group under Mr. Ajay Banga

The African Development Bank under Dr. Akinwumi Adesina

The Rockefeller Foundation

The Global Energy Alliance for People and Planet (GEAPP)

Sustainable Energy for All (SEforALL)

He also highlighted ongoing efforts to expand renewable energy access, especially in rural and underserved areas, through the Ministry’s energy transition programs.

“Let’s use this moment to ask the hard questions, find practical solutions, and develop actionable plans to bring power to our hospitals, schools, industries, and homes,” he added.