• Tasks Discos on capitalisation
Amid the uncertainty surrounding electricity subsidy in the country, the Minister of Power, Adebayo Adelabu, foresees a shift towards cost-reflective tariffs within the next three years.
The minister, who spoke during a visit to Ikeja Electric (IE) in Lagos last Thursday, emphasised the need to align electricity tariffs with the actual cost of generation, distribution and transmission, saying it is pivotal for ensuring the financial viability of the sector and fostering investment for infrastructure development and expansion.
Adelabu, however, stated that until the quality of service in the industry is improved, it would be difficult to talk about tariffs.
He noted that once the Distribution Companies are able to show consumers that there is stability across the bands within a month, talks on how to sustain it and the tariff would begin.
“Over the next three years, we should migrate to a cost reflective tariff; the government cannot continue to subsidise electricity. Despite IE performance, Nigerians are still not happy. They need to heighten their game for more improved performance,” he said.
Adelabu stated that the President Bola Ahmed Tinubu administration is poised to address the liquidity and other issues affecting the sector.
He commended IE on their performance, emphasising that it is a model DisCo, which others need to emulate for improvement in terms of revenue generation and reduction in ATC & C losses.
Adelabu encouraged the DisCos to focus on capitalisation and increased investment in the sector.
He said that over the years, investment has been very poor, adding that that is why the DisCos have not been able to reduce their losses significantly.
“If we cannot get them to do investment by persuasion we will get them to do it by legislation and that is the need for DisCos to bring in significant funds into the business to invest in improved infrastructure so that service quality would be better than what we have now,” he said.
Chief Executive Officer of IE, Folake Soetan, said the minister’s visit was encouraging, as he shared his vision of improving supply in the next three to six months.
According to her, the minister made a commitment to the DisCo to fast track the issues that must be resolved to achieve improved and better power supply.
