Adelabu: Electricity Tariffs May Reduce Gradually as Nigeria Raises Power Production

*FG secures additional $750m for solar, mini-grids

Emmanuel Addeh in Abuja

The Minister of Power, Adebayo Adelabu, yesterday stated that as Nigeria continues to ramp up the generation and distribution of electricity nationwide, the country will achieve economies of scale, leading to a gradual fall in tariffs.
Adelabu said the recent rise in electricity tariffs for Band ‘A’ customers was temporary hardship, expressing optimism that the tariff will drop gradually as the country’s power sector increases its output.

Speaking at the sectoral briefing by ministers in Abuja, organised by the Ministry of Information, the minister stated that the cost-reflective tariffs for the premium customers were introduced to drive liquidity in the sector.
He pointed out that this was similar to the initial price surge observed in the telecommunication sector, which eventually saw prices decrease over time.
“The electricity tariff might look expensive at the moment. But I’m optimistic that these tariffs will go down. We know how much we were buying sim cards when telecoms companies just came. We knew how much we were buying telephones.

“But gradually as we scale up in generation, transmission and distribution, these prices will also go down. It’s a temporary hardship that will lead to a permanent gain,” Adelabu said.

He stated that for the first time in the country’s history, the power Distribution Companies (Discos) can guarantee 20 hours of power supply for a minimum of 15 per cent of customers under the Band ‘A’ category, stressing that no previous administration was able to ensure such a level of power supply to even 1 per cent of customers.

He also highlighted that the government had facilitated enhanced service levels in the sector as Discos now address customer complaints promptly.
“In distribution, our Discos are more responsive and active. Today, Discos will send you information and updates of power outages at a given period of time. Now, they have woken up to their responsibility because of improved regulatory oversights.

“For the first time in the history of Nigeria, we have what is called guaranteed improved service level. It might be for Band ‘A’ today, but no government has ever guaranteed 20 hours of supply not to even 1 per cent of consumers. But to 15 per cent of  consumers, we said let us start from here.
“And we have guaranteed service level for Band ‘A’ customers with the introduction of cost-reflective tariffs to that Band, a key liquidity condition suitable for driving investment,” he noted.

He further declared that the fastest way of providing energy access to 95 million Nigerians that are currently unserved will be through Distributed Energy Resources (DRE).
He reiterated the federal government’s commitment to achieving the energy transition target of net zero carbon emissions by 2060 also through the DRE programme.

“The federal government of Nigeria is committed to achieving our Energy Transition target of net zero carbon emissions by 2060 and we believe the fastest way of providing energy access to 95 million Nigerian that are currently unserved will be through DRE,” he said.

According to the minister, the DRE programme includes the investment and development of mini and micro grids, solar home systems, solar street lights, and also the conclusion of the $550 million Nigeria Electrification Plan (NEP).
He said that this has bridged the energy access deficit by providing electricity to over 1.1 million households, small businesses, as well as educational and healthcare facilities in unserved and underserved rural communities.

He said that already, due to the success of the Nigeria Electrification Project (NEP) the federal government had finalised an additional $750 million facility to increase access to electricity for 2.5 million households through the deployment of solar home systems and mini-grids to households, educational and health facilities throughout Nigeria.

“In the next two months, we will commission 35 MW of solar projects developed to power the following educational institutions, University of Abuja, Nigerian Defence Academy, Federal University of Agriculture Abeokuta, University of Maiduguri and Teaching Hospital, Federal University Gashua, and Michael Okpara University of Agriculture Abia State,” he noted.

Also, the Minister of Housing and Urban Development, Ahmed Dangiwa, said the administration of President Bola Tinubu had designed plans to ensure that the persistent housing deficit gap is closed through various strategic programmes.