Minister of Power Joseph Tegbe says the Federal Government will gradually end electricity subsidies from 2027 without raising tariffs or cutting power supply, as debt to GenCos tops ₦6.5 trillion.
The federal government has announced plans to phase out subsidy payments in the power sector from 2027
Joseph Tegbe, the minister of power, announced the plan during a media interactive session on Friday, while speaking on the power sector debt. He said the subsidy will be gradually removed, but noted that Nigerians will not be deprived of any benefits.
“We have the mandate of Mr. president to clear the legacy debt and come up with sustainable structures to make sure this doesn’t pile up any more,” Tegbe said.
Tegbe Pledges To End Subsidy ‘Next Year’ Without Cutting Power Supply
“I promise you, next year, by God’s grace, we will put a stop to this so-called subsidy in the power sector. Mr. President, we will not deprive Nigeria of anything. We’ll make sure Nigerian consumers continue to have power and improve power services,” Tegbe said.
The plan, if executed, aligns with the International Monetary Fund (IMF) recommendation for Nigeria to phase out electricity subsidy.
The federal government had bemoaned the subsidy burden pegged at N3 trillion as at February 2024. The Association of Power Generation Companies (APGC) recently said the federal government owes about N6.5 trillion debt to GenCos.
Government Has Issued Bonds Worth Over N1.2 Trillion To Clear Legacy Debt
Tegbe’s latest announcement also comes amid steps already taken by the government to clear power sector debt, following a presidential approval for the issuance of a N4 trillion bond.
In January, the federal government issued a N501 billion inaugural bond under the presidential power sector debt reduction programme (PPSDRP). On July 20, it announced the issuance of the second tranche of a bond valued at about N729 billion for the settlement of verified legacy debts owed to GenCos.
Earlier in February, President Bola Tinubu directed all ministries, departments and agencies (MDAs) to rely on existing electricity sector laws to clearly define how power subsidy costs are shared among the federal, state, and local governments in the 2026 budget.
