The Senate Committee on Finance yesterday grilled the Nigerian Bulk Electricity Trading Plc (NBET) over escalating debt in the power sector, which now stands at approximately ₦3 trillion.
NBET Acting Managing Director, Johnson Akinnawo, informed lawmakers that the persistent gap between electricity tariffs and the actual cost of generation, transmission, and distribution continues to undermine sector stability.
“Although ₦858 billion was appropriated for NBET in 2025, only ₦60 million was released, severely impacting our ability to execute planned projects,” Akinnawo said.
Senator Mohammed Musa, Committee Chairman, noted that while market receipts appeared strong on paper, operational realities reflect systemic instability.
“If performance is strong, the market should be sustainable, but that is clearly not the case,” Musa said.
Akinnawo also highlighted structural deficits in the electricity market, with low collections from distribution companies (DisCos) constraining payments to generation companies (GenCos).
“Every GenCo is paid on a pro-rata basis depending on collections remitted by DisCos. Government intervention via partial risk guarantees is critical to bridging funding gaps,” he explained.
The Senate committee raised concerns over foreign exchange exposure, as generation tariffs are dollar-indexed, and urged NBET to provide a clear breakdown of revenues and expenditures for better oversight.
Debt Management Efforts
Debt reconciliation is ongoing under the Presidential Power Sector Debt Reduction Committee, chaired by Finance Minister Wale Edun, aimed at addressing outstanding liabilities across the electricity value chain.
Akinnawo further revealed that NBET’s ₦858 billion budget was reduced to ₦601 billion, and the ₦60 million release was tied to a ₦200 million project, which could not proceed under procurement rules in piecemeal installments.
“These challenges reflect the complex interplay of underfunding, revenue shortfalls, and structural deficits that continue to weigh on the Nigerian power sector,” he said.
