Business
FG Targets Power Sector Transition To Cost-Effective Tariffs
Nigeria’s electricity tariffs are expected to rise in the coming months as the Federal Government works towards transitioning to a cost-efficient, cost-reflective pricing model.
The Special Adviser to the President on Energy, Olu Verheijen, disclosed this while speaking to Journalists in Dar es Salaam, Tanzania.
In a Statement, Verheijen, who stressed the need for higher electricity tariffs to ensure the sustainability of the power sector, noted however that while tariffs must reflect the actual cost of power supply, subsidies would be maintained to protect low-income consumers.
“One of the key challenges we’re looking to resolve over the next few months is transitioning to a cost-efficient but cost-reflective tariff.
“This is needed so the sector generates revenue required to attract private capital, while also protecting the poor and vulnerable”, she explained.
According to her, Nigeria’s power industry requires substantial investment to meet its development targets.
Out of the country’s 14 gigawatts of installed power capacity, only 8 gigawatts can be transmitted nationwide, and merely 4 to 5 gigawatts are reliably delivered to homes and businesses.
Verheijen insisted that Nigeria’s energy policies must be aligned with its long-term economic goals.
“Your energy policies have to be closely linked with your own ambition for your country.
“Our own ambition is to be a $1 trillion economy in five years and to move to an upper-middle-income country in 25 years”, she said.