The Managing Director and Chief Executive Officer of the Niger Delta Power Holding Company (NDPHC), Jennifer Adighije, has said that the recent electricity tariff adjustment, especially the cost-reflective tariff introduced for Band A customers, helped save Generation Companies (GENCOs) from financial collapse.
Adighije spoke as a guest on Channels Television’s Politics Today program aired on Thursday.
“So, I really want to commend the Honourable Minister of Power, Adebayo Adelabu, for the boldness and the courage to effect this policy that has saved the GENCOs from collapse.
“Now, we’re able to get about 30% of invoice settlement on the invoices that we issue, and that has also helped our liquidity. Before that, we were unable to meet our operational and OPEX and CAPEX obligations, but now we’re able to develop a coping mechanism and we’re surviving.”
She explained that before the Band A tariff reform, only 10% of GENCO invoices presented to the Bulk Trader were settled. But with the implementation of the Band A structure, which covers just 15% of the market, liquidity in the sector increased by 70%, rising from ₦1 trillion to ₦1.7 trillion.
“The electricity that we’ve consumed over the years hasn’t been cost-reflective. And so there are tariff shortfalls and then market shortfalls also arising from the complexities in the electricity market—the losses the DisCos are not able to remit optimally,” she noted.
According to her, GENCOs are currently owed ₦600 billion, with ₦400 billion of that debt attributable to the federal government through the Bulk Electricity Trading Company.
“Well, it’s combined. It’s combined because we have customers that are government customers and then we also have private customers in terms of off-takers, bilateral customers, and eligible customers that are also owing. About ₦400 billion is being owed by the government, you know, through the Bulk Electricity Trading Company,” she stated.
‘Nigerians Should Be Prepared to Pay’
When asked what could help Nigeria achieve a stable 24/7 power supply, the NDPHC managing director said Nigerians must either pay optimally for uninterrupted electricity or the government must apply smarter, more effective subsidies.
“I’m going to say this very factually and very dispassionately. The truth is that electricity, power generation, is not cheap. So, it’s one of two things.
Nigerians should either be prepared to pay optimally for quality, uninterrupted electricity, or the government should be prepared to subsidise optimally to enable the GENCOs to generate efficiently and transmit to the last mile most cost-effectively.
“Not necessarily, because the subsidies, for instance, can still be applied more effectively and more smartly through smart meters.
“You now have AI-enabled meters that can apply a subsidy on consumption, you know, and that way it’s even more accountable. So, the government can still apply subsidies more cost-effectively, and then electricity will be delivered optimally,” she stated.
‘Reforms Don’t Happen Overnight’
When asked whether the current administration has fulfilled its promise to double electricity generation capacity, Adighije defended the government’s performance and highlighted recent milestones achieved under President Bola Tinubu’s leadership.
“So, we haven’t failed Nigerians. You know, transformation reforms don’t happen overnight, right? We’re steadily making progress.
“Under this same administration, we’ve hit a peak generation of 6000 megawatts. I mean, that’s a historical milestone. On the 2nd of March, you can go and verify—we hit a peak generation of 6000 megawatts, and we’re steadily progressing and ensuring that we can sustain this.”
She added that the Tinubu administration has laid the groundwork for long-term stability in the electricity sector.
“The most important thing is that Mr President has very graciously laid the right foundations—the right legislative foundations, the right policy foundations, and the right regulations.
“As you know, upon assumption of office, he insisted on the passing of the Electricity Act, which has essentially decentralized and liberalized the sector.
And so we’re now able to transact business bilaterally. We’re now able to think out of the box, to be more innovative, more competitive, and, of course, that will drive growth.”
(Channels Tv)
