The Federal Government has raised approximately N1.23 trillion as part of efforts to address outstanding debt in Nigeria’s power sector, according to Minister of Power Joseph Olasunkanmi Tegbe.
Tegbe made the disclosure during a media session with senior journalists in Abuja on Monday, as the government continued efforts to improve the financial position of the electricity value chain.
The broader debt burden was estimated at N3.3 trillion in the supplied account.
Liquidity and the Electricity Value Chain
The minister reportedly said that improving liquidity was essential because financial weakness in one part of the power value chain could affect the performance of other segments.
Nigeria’s electricity value chain includes generation, transmission, distribution and associated market participants. Financial obligations between these segments can affect the ability of operators to maintain and improve service delivery.
Government Debt-Management Measures
Reports from The Guardian state that the Federal Government ruled out an immediate electricity tariff increase while announcing the financing arrangement to address the sector’s debt.
The Guardian Nigeria
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The precise composition of the debt, the financing terms and the allocation of the funds should be established from official government documents.
Addressing outstanding liabilities is one component of improving the sector’s financial stability. The long-term effect on electricity supply and service quality depends on the broader implementation of power-sector reforms.