Nigeria, Abuja: The Federal Government of Nigeria plans to spend $3 B on the energy sector and end the current electricity subsidies by December 2021.

The spending is expected to increase the power being wheeled by the Transmission Company of Nigeria (TCN) from the current 4,900 MW to at least 7,000 MW.

Speaking during a webinar hosted by the Abuja Chamber of Commerce and Industry, Special Adviser to President Muhammadu Buhari on Infrastructure, Ahmad Zakari, said that following the $500 M loans the government secured from the World Bank earlier this year, it is expecting another facility from the African Development Bank (AfDB), saying that the gestures are a demonstration of confidence in the reforms being currently made in the sector.

Zakari said: “With this enhanced metering on the service-based tariff, we can see the Nigerian electricity supply industry generating over $240 M (N100 B) in the near to mid-term. This is very impressive.”

Zakari said that the current administration was focused on moving from the traditional way of funding subsidies or using the liquidity in the sector to fund consumption. Rather, he said, the subsidy budget would go into infrastructure that would ultimately lead to growth.

“If you generate 10 GW of power, the tariff will be half of what it is now. Keeping the prices officially low is not the approach; increasing delivery power is the approach that will effectively get the same output, which is, making the citizen pay lower,” said Zakari.

Source: ESI Africa