Power Minister Raises Alarm Over N200 Billion Monthly Electricity Subsidy, N4 Trillion Debt to GenCos
The Minister of Power, Chief Adebayo Adelabu, has once again expressed serious concerns over the sustainability of the Federal Government’s electricity subsidy payments, warning that the monthly shortfall has escalated to N200 billion.
He revealed that the government’s total indebtedness to electricity Generation Companies (GenCos) has now reached N4 trillion, including N1.94 trillion accrued in 2024 alone.
Adelabu made these remarks during a two-day retreat organized by the Senate Committee on Power, as disclosed in a statement by his Special Adviser on Strategic Communication and Media Relations, Mr. Bolaji Tunji.
The Minister emphasized that the prevailing electricity tariff structure is no longer viable, as it significantly drains public funds that could be invested in critical infrastructure upgrades.
“The sector is grappling with a subsidy backlog of N4 trillion owed to GenCos, with N1.94 trillion accumulating in 2024. With monthly subsidy payments now exceeding N200 billion, this situation is unsustainable and diverts vital funds from infrastructure development,” Adelabu stated.
To address the crisis, the Minister announced plans to restructure underperforming Distribution Companies (DisCos) and enforce stricter performance benchmarks.
However, he warned that without immediate capital injection into distribution networks, recent achievements in power generation—such as the record-breaking 6,003MW output in March 2025—and significant transmission improvements, including the deployment of 61 new transformers in 2024, may not translate into consistent power supply for consumers.
Adelabu identified chronic underinvestment in distribution infrastructure as the most significant threat to sectoral progress, despite years of reform. He decried the persistent inefficiency and underperformance of several DisCos, citing outdated networks, widespread electricity theft, and inadequate investment as key issues undermining service delivery.
“We must hold DisCos accountable. Many have failed to meet expectations, frustrating the impact of gains made in power generation. No matter the improvements at the generation level, they mean little to the public if electricity cannot be reliably distributed,” he said.
Reflecting on the 2003 sector privatization, Adelabu noted that many DisCos misrepresented their technical partnerships with foreign firms, which often withdrew shortly after acquisition.
Instead of investing in infrastructure, these companies reportedly diverted resources to repay acquisition loans, further compounding the sector’s woes.
Despite a 70% increase in market liquidity following tariff adjustments—which raised revenues from N1 trillion in 2023 to N1.7 trillion in 2024—distribution remains the weakest link in the power value chain.
Adelabu cited troubling regional disparities in DisCo performance. In Q4 2024, Northern DisCos remitted only N124.4 billion (30%) out of their N408.86 billion invoice.
Notably, Abuja DisCo contributed 85% of that remittance. Southern DisCos performed slightly better, remitting N254.6 billion (67%), but 70% of the sum came from Lagos-based DisCos, where infrastructure is relatively better.
He linked these disparities to inadequate investment outside major economic hubs, where networks remain dilapidated. The Minister also underscored the country’s persistent metering gap as a major contributor to revenue loss and public distrust.
“To address this, the government launched a N700 billion Presidential Metering Initiative (PMI) and a World Bank-supported program targeting 4.3 million meters by 2025. In April 2024, 75,000 meters were deployed, with another 200,000 expected in May,” he said.
“However, we’re still far from closing the gap due to underinvestment and operational inefficiencies.”
Adelabu also announced plans to attract private investment into grid infrastructure and to regionalize transmission networks to reduce failure risks. He cited the higher remittance levels by Lagos DisCos as evidence of the benefits of robust infrastructure.
Turning to the Northern region, the Minister disclosed plans to boost power generation through the development of the 1,000MW Makurdi hydropower project and the revitalization of the long-abandoned 215MW Kaduna thermal power plant, which is already 87% complete.
Additionally, he noted that the Katsina State Government has expressed interest in taking over the 10MW Katsina wind farm, in collaboration with private investors. A feasibility study has been commissioned to assess the potential for concessioning the long-abandoned facility.
Adelabu called on the National Assembly to enact stronger legislation to protect Nigeria’s power infrastructure from vandalism and theft, emphasizing the need for legal reforms to classify such acts as criminal offenses rather than civil infractions.
“Power theft, vandalism, and illegal connections are crippling our efforts. These are not just technical problems—they are national security concerns,” he said.
Despite these challenges, the Minister highlighted improved grid stability, noting that no nationwide grid collapse has occurred since the beginning of 2025. This, he said, was achieved through significant investments, including the installation of 61 transformers in 2024 and 13 more in early 2025, ranging in capacity from 10MW to 300MW.
“These installations cost hundreds of millions of dollars, yet they remain vulnerable to sabotage. Our transmission towers are being toppled, meters tampered with, and illegal connections rampant. This must stop,” Adelabu stated.
He urged the public to protect critical energy assets and appealed for legislative backing to enforce more stringent penalties for power-related offenses.
The Minister made a case for increased budgetary allocation to the Transmission Company of Nigeria (TCN), noting that the company is severely underfunded and currently operates solely on internally generated revenue (IGR), which is insufficient to cover salaries, let alone maintenance and expansion.
“We must find a way to include TCN in the national budget. Their role is too critical for them to continue operating under such financial strain,” he concluded.