Nigeria’s electricity minister Adebayo Adelabu announced that Nigeria’s electricity subsidies were reduced by 35% after tariffs increased by certain consumers last year, Reuters reported.
The country is the most populous country in Africa and has struggled to cope with the power sector plagued by unreliable power grids, gas shortages and financial challenges.
Nigeria previously allocated nearly US$ N200 billion (US$125.01 million) per month to provide electricity subsidies due to non-commercially viable tariffs.
The government’s decision to remove subsidies for the top 15% of electricity consumers, covering households and businesses with high consumption rates, which has led to a large amount of financial situation.
At Abuja’s press conference, Adelabu highlighted the positive impact of the target tariff adjustment, “the market generated another 7 billion guild revenue, reflecting 70% growth.”
This strategic move not only eases the state’s financial burden, but also leads to increased power generation and a reduction in government tariff shortages from N3TN to N1.9TN.
Despite these advances, the electricity sector in Nigeria is facing significant challenges.
With an installation capacity of 13GW, the country usually produces only one-third of this potential, thus relying heavily on expensive alternative power supplies.
The Nigeria Sovereign Investment Agency (NSIA), Owners (SEFORALL), International Solar Energy Alliance (ISA) and Africa’s 50 Years of Sustainable Energy have recently launched a $500 million distributed renewable energy (DRE) Nigeria Fund.
The fund aims to support the development and financing of DRE projects in Nigeria. It will focus on investing in mini parry, solar home systems, commercial and industrial power solutions, embedded generation projects, and innovative energy storage technologies.
The aim is to provide Nigeria’s housing and businesses with more reliable and cost-effective power to promote the country’s journey towards energy sustainability.
“Nigeria cuts electricity subsidies by 35% after hikes in tariffs for heavy-duty users”, originally created and published by global Data-owned brand Power Technology.
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