Against the backdrop of reforms and the introduction of Service-Based Tariff (SBT), power Distribution Companies (DisCo) have increased revenue by 63 percent.
According to Vice President Yemi Osinbajo, government subsidy in the sector will soon be limited as metering and other reforms improve the efficiency of the sector.
Osinbajo, who spoke at the 14th annual conference of the Nigerian Association of Energy Economics (NAEE), said with increased funding, the power sector would soon be fully financed by the market, rather than government subsidies.
“It is anticipated that all electricity market revenues will be obtained from the market with limited subsidies as reforms in metering and efficiency with the Discos continue to improve.
“There is an accelerated investment in transmission and distribution (over $3 billion) infrastructure that will put Nigeria on a path to 10GW+ and beyond through interventions with the CBN, the Siemens partnership, the World Bank, and African Development Bank and others,” the vice president said.
He said that efforts to invest $3 billion in revamping the distribution and transmission networks were ongoing in collaboration with the private sector,
The vice president, who was represented by Special Adviser to the President on Infrastructure, Ahmad Zakari, stated, “Electricity tariff reforms with the service-based tariff have increased collections from the electricity sector by 63 percent, increasing revenue assurance for gas producers and stabilising the value chain.
He said the current administration had continued to invest in expanding generation to cater to its current and future needs.
He disclosed that the Okpai PH II plant, the Afam III fast power plant, the Zungeru hydro plant, and the Mabilla hydro plant would add more than 1000 MW in both gas and renewable segments to the country’s generation capacity.
He said the present administration has transformed the Rural Electrification Agency (REA) into a renewable energy-driven organisation with solar power at its heart, with the five million solar connections programme, the Solar Power Naija.
This aims to supply power to 25 million citizens through private and public-private partnerships and is the largest off-grid connections programme in Africa.
He stated that the energy sector was one of the most critical sectors hit by COVID-19 due to the fact that it relies on human input.
According to him, the lockdown in major cities and restrictions in movement across the globe caused a halt in the operations of many energy organisations, leading to huge revenue losses for both the public and private sectors.