FG targets 24-hour power supply with Energy Zones in high-demand areas

The Federal Government of Nigeria is working towards establishing Energy Zones in the country's most electricity-demanding regions, aiming to provide reliable, 24-hour power supply to homes, businesses and industries. These zones will be set up in the Lagos axis, Abuja-Kaduna-Kano and Enugu-Port-Harcourt corridors. The plan was discussed during a strategic meeting with top executives from several electricity distribution companies, including the Abuja Electricity Distribution Company (AEDC), Ikeja Electric, Eko Power Ltd, Ibadan Electricity Distribution Company (IBEDC) and Sahara Energy Group.

The initiative is aimed at resolving distribution constraints, unlocking demand from commercial and industrial sectors, and enhancing DisCo revenue and collections.

The challenges in Nigeria's power sector are not limited to generation and transmission; they also involve the capacity to absorb and deliver electricity to consumers through the distribution network. Therefore, the proposed Energy Zones are designed to bolster infrastructure in high-demand areas and ensure that available power supply reaches the consumers.

The meeting is a part of the Minister of Power, Joseph Tegbe's commitment to a disciplined and sequential approach in tackling the sector's issues. Nigeria's electricity distribution market is currently facing significant revenue gaps, with the combined shortfall between the electricity supplied and the revenue collected amounting to approximately N1.36 trillion.

This underscores the need for the distribution and collection reforms that the proposed Energy Zones are intended to bring about. The government has no immediate plan to raise electricity tariffs, as it prioritizes these distribution reforms. To settle outstanding debts to power generation companies and gas suppliers, the government plans to issue up to N4 trillion in government-backed bonds. However, this strategy has raised concerns over potential debt-for-debt risks.