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 programme aired yesterday.
“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 N1 trillion to N1.7 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 N600 billion, with N400 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, eligible customers that are also owing. About N400 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 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, uninterruptable electricity, or the government should be prepared to subsidise optimally to enable the GENCOs generate efficiently and transmit to the last mile in the most cost-effective manner.
“Not necessarily, because the subsidies, for instance, can still be applied more effectively and more smartly through smart meters. You have AI-enabled meters now that can actually apply subsidy on consumption, you know, and that way it’s even more accountable. So, the government can still apply subsidies and in a more cost-effective manner actually, and then electricity will be delivered optimally,” she stated.