The Federal Government of Nigeria has announced that it will not increase electricity tariffs in the near future. Instead, the government has raised N1.23 trillion to settle the backlog of debts in the power sector. This disclosure was made by the Minister of Power, Joseph Tegbe, during a media parley to mark his first 100 days in office. The minister stated that the government's focus is on stabilizing the electricity market, improving supply, and addressing financial challenges across the power value chain.
According to Minister Tegbe, electricity generation and transmission have remained above 5,000MW over the past couple of weeks. This is a significant improvement compared to the 3,700MW to 4,700MW range recorded before June. The minister attributed this improvement to the government's efforts to address the structural and financial problems responsible for the persistent challenges in the electricity market. He emphasized that the government is committed to finding a lasting solution to the sector's challenges.
The N1.23 trillion raised by the government is part of a wider program aimed at addressing the estimated N3.3 trillion power-sector debt. The minister described this as a significant financing milestone, which is expected to improve sector liquidity. The government's approach is to address the root causes of the sector's challenges, rather than simply injecting funds without identifying the problems. This approach involves conducting a diagnosis of the electricity value chain to identify constraints and develop solutions.
The diagnosis conducted by the ministry revealed constraints in gas supply, generation, transmission, and distribution. The minister stated that gas supply to power stations has been constrained by damaged pipelines and commercial terms that discourage investment. Additionally, the generation fleet remains heavily dependent on aging thermal plants affected by deferred maintenance and stalled projects. These challenges have undermined the sector's performance and contributed to the debt.
The minister disclosed that only 27% of generation companies' bills are being paid, which undermines their ability to maintain plants and pay gas suppliers. The transmission network is also affected by vandalized towers and lines, overstretched equipment, and frequent tripping. Furthermore, the distribution segment suffers from aggregate technical, commercial, and collection losses of between 30 and 40%. These challenges are interconnected and have contributed to the sector's debt.
Despite the improvement in electricity generation and transmission, the minister acknowledged that the gains have not translated into reliable electricity for all communities. He stated that the government's next task is to sustain these gains and translate them into more dependable supply at the customer level. The minister also disclosed that a generation peak of 5,330MW was recorded between August and September.
The government has also taken steps to address estimated billing and improve revenue collection through metering. Approximately 350,000 meters were installed during the first 100 days of the minister's tenure, while cumulative installations reached 1,004,260 as of August 2026. The resolution of the AMMON litigation has also unlocked the procurement of about 1.4 million smart meters across affected programs. Additionally, the government has blocked revenue leakages associated with energy theft and revenue losses estimated at approximately N120 billion yearly.
Key points
- The Federal Government has ruled out an immediate increase in electricity tariffs.
- The government has raised N1.23 trillion to settle the backlog of debts in the power sector.
- Electricity generation and transmission have remained above 5,000MW over the past couple of weeks.
