Tariff Reforms Slashed Subsidy By N1.1trn – Adelabu

Nigeria’s power sector has achieved a significant financial turnaround in the first quarter of 2025, with tariff reforms leading to a dramatic reduction in subsidy shortfall and substantial revenue growth.

The federal government also announced its plans to achieve at least 8,000 megawatts in power generation before the end of President Bola Ahmed Tinubu’s first term in office in 2027.

Minister of Power, Adebayo Adelabu stated these during the ministerial press briefing in Abuja on Thursday

During his presentation of the ministry’s first 100 days performance review for Q1 2025, Adelabu revealed that the government’s transformative tariff reforms have generated an additional N700 billion in revenue, reflecting a 70 per cent increase compared to previous periods. Market revenue rose from N1 trillion in 2023 to N1.7 trillion, marking unprecedented growth in the sector.

“This growth in market revenue is unprecedented, as the highest growth previously achieved was 20 per cent,” Adelabu stated during the presentation.

The minister highlighted that the cost-reflective tariff adjustment for Band A customers has positively impacted the reduction of the government-subsidised tariff shortfall by 35 per cent, decreasing it from N3 trillion to N1.9 trillion. This represents a reduction of N1.1 trillion in subsidy burden on the federal government.

“This demonstrates that financial viability and service delivery can coexist harmoniously,” the minister emphasised.

According to Adelabu, the first quarter of 2025 has seen remarkable improvements in power generation capacity. On March 2, 2025, Nigeria reached a generation available capacity of 6,003 MW, the highest in the country’s history, followed by a peak generation evacuation of 5,801.44 MW on March 4.

The average daily power generated and distributed in Q1 2025 was 5,700 MW, compared to 4,100 MW in the third quarter of 2023, indicating a growth of 1,600 MW or nearly 40 per cent since the current administration took office.

“Given that it took the country almost 40 years to achieve an incremental 2,000 MW average energy, we accomplished this in less than two years,” Adelabu noted.

According to him, one of the major focuses of the power sector under the president Tinubu-led administration is to improve generation and improve energy security, adding that in the past months, progress have continuously been made in this direction.

He stated that on 2nd of March 2025, Nigeria reached a remarkable generation available capacity of 6,003 megawatts, marking the first time this level had been recorded in the country’s history of the power sector.

“Let me thank our agencies, our operators, that this was achieved during our time. We have crossed the bar of 6,000 megawatts for the first time in the history of Nigeria’s power sector.

This achievement was followed by a peak generation evacuation of 5,801.44 megawatts on 4th of March 2025, which also saw an impressive daily energy output, the highest ever.

“The average daily power generated and distributed in the past quarter of 2025 was 5,700 megawatts. Compared with what we met when we resumed office, average of 4,100 megawatts achieved in the third quarter of 2023. This indicates a growth of 1,600 megawatts, nearly 40 percent growth since we assumed office at the ministry.

He explained that while it took the country about 40 years to achieve 4,000 megawatts of power generation, this administration, in one and a half years, has achieved a peak generation of 5,800, that is 1,700MW in one and a half years.

“What we are saying is that past administrations have their own positives. Creation of the NIPPs, vibration of the sector, a lot of things that was achieved. But if they have been adding at least 1,000 megawatts of power since 1999, we’ll be talking about 26,000 megawatts plus 2,000 plus 4,000. That would be about 30,000 megawatts of power in Nigeria today. But you cannot keep dwelling in the past.”

He noted that the current administration have created a trajectory which must be sustained. “And if sustained, I can assure you that before the end of this administration in 2027, we should be able to generate and distribute nothing less than 8,000 megawatts of power.”

He also disclosed that through targeted interventions by the new management of the Niger Delta Power Holding Company, 232.5 megawatts of previously idle capacity have been restored from the Omotosho and Benin plants.

Adelabu also noted that across Plateau, Cross River, Niger, Oyo and Osun States, new off-grid and interconnected mini-grid projects were commissioned, supplying thousands of households with clean energy. Some locations include; 550KWp at Bakin Ciyawa and Kwande communities in Plateau, 440kWp Mini-Grid in Cross River State, 990kW Mini-grid to Power 3,900 households in Niger State and 510KwP solar hybrid mini-grid in communities in Osun State.

He said, “NDPHC has carried out the construction, improvement, and installation of 14 transmission lines across the country, as well as the rehabilitation of the existing TCN 2 x 132kv line bay extension at TCN Papalanto substation (lot 14) Papalanto Ogun state and 330KV DC AFAM – Ikot Ekpene Transmission Line 65KM (LOT 4A)

“In addition to their impressive generation initiatives, Sun Africa Energy and Skipper Electric are keen to invest in Nigeria’s power sector, emphasising renewable generation and grid expansion. Their proposals are currently being reviewed and evaluated. This will facilitate the integration of solar energy into the national grid instead of conventional hydro and thermal generation, enhancing overall generation capacity and ensuring energy security.

“Furthermore, the process of full evacuation from the Zungeru and Kashimbila hydropower plants is underway. Zungeru currently evacuates 550MW out of the 700MW capacity, while Kashimbila evacuates 40MW of the 40MW available capacity.

“We are in the initial phases of developing the Makurdi hydro project and revitalising the Kaduna thermal plant, both of which will enhance power generation on the grid. Makurdi holds the potential for significant hydropower generation of approximately 1500MW.

“The Kaduna thermal plant is 87 percent finished and has a capacity of 215MW; it was inactive for about six years prior to the current administration. Efforts are underway to restore this plant, which is expected to be operational by the end of the year,” he added.