Underperforming DisCos, GenCos will be penalised, says power minister, Tegbe

 The Ministry of Power says it will penalise underperforming
distribution and generation companies (DisCos and GenCos) and implement tariff
reforms to support Nigeria’s industrialisation.

 

Joseph Olasunkanmi Tegbe, minister of power, disclosed this
in a policy brief presented by Martins Olajide, his special adviser, at the
NESG industrialisation and competitiveness forum on Wednesday.

Tegbe said the ministry would introduce performance
scorecards for power sector staff, DisCos and GenCos, with rewards for
excellence and penalties for underperformance.

He said the scorecards would strengthen accountability
across the electricity value chain and ensure operators are held to clear
performance standards.

The minister also proposed tariff reforms to protect
vulnerable consumers while ensuring electricity supply obligations are met
across the value chain.

Tegbe said the measures form part of an eight-point agenda
to stabilise the power value chain, restore market discipline, and strengthen
governance.

He said Nigeria has 13,625 megawatts (MW) of installed grid
capacity, but average daily availability stands at only 4,854MW — noting that
about 62 percent of installed capacity is idle, despite realistic peak demand
of about 20,000MW.

“The power arithmetic does not add up,” Tegbe said.

The minister said the gap between available supply and
demand has pushed households and businesses towards self-generation.

Tegbe said Nigerians spent an estimated N16.5 trillion on
self-generated electricity in 2023, compared with about N1 trillion in revenue
generated by the national grid.

Citing World Bank estimates, the minister said inadequate
electricity supply costs Nigeria about $25 billion annually, equivalent to 5
percent to 7 percent of gross domestic product (GDP).

Tegbe said addressing the performance of operators and
reforming tariffs are central to creating a more reliable electricity market
capable of supporting industrial productivity.

The minister said the government’s broader agenda also
includes measures to strengthen the electricity value chain and improve the use
of existing power infrastructure.

He said the ministry plans to enhance the Lagos, Enugu-Port
Harcourt, and Abuja-Kaduna-Kano transmission corridors, with Lagos serving as a
proof of concept for the wider grid stabilisation programme.

Tegbe said the government would also pursue measures to
reduce commercial and technical losses and continue programmes aimed at
expanding electricity metering.

The minister said the government also plans to optimise
generation and transmission assets through targeted economic clusters and
corridors to improve asset utilisation and attract investment.

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