Tegbe made the remarks at an energy conference organised by the Harvard Business School Association of Nigeria, where industry experts and regulators discussed challenges facing the country’s power sector and possible solutions.
The minister said the administration was working to address structural weaknesses in the electricity market, including poor revenue collection, inadequate metering infrastructure, mounting debts owed to power generation companies (GenCos) and flaws in the existing market structure.
He identified the failure of operators across the electricity value chain to recover their operational costs as a major factor undermining efforts to ensure a stable power supply.
“Commercially viable pricing will work where the supplier can actually collect his money and get paid. There’s no sense in commercially viable pricing if you don’t collect money,” he said.
Tegbe disclosed that the Federal Government was collaborating with the Nigerian Electricity Regulatory Commission (NERC) to review tariff assumptions and reform the electricity market.
He also questioned the continued viability of the Nigerian Bulk Electricity Trading (NBET) model, under which the government-owned agency purchases electricity in bulk from generation companies and resells it to distribution companies (DisCos).
The minister argued that the model had become unsustainable because it did not consistently ensure full cost recovery, leaving the government to cover financial shortfalls.
“As for NBET, we know that every human being, even businessmen in this room, would take opportunities where they see it. NBET as a government entity today buys bulk, sells bulk. Because it’s the government, people take advantage,” Tegbe said.
He maintained that NBET should have been phased out several years ago, adding that his plan was to move away from the model as part of broader electricity market reforms.
“Now, NBET ought to have been sunset about five years ago, and I’m telling you my own plan, at the end of the day, is to move from that model. That model will not help Nigeria. We can’t keep covering tariff shortfalls and think we’ll give power to every Nigerian,” he said.
The minister’s comments highlight the financial pressures facing Nigeria’s electricity industry, particularly the gap between the cost of supplying electricity and the revenue recovered from consumers.
His proposed reforms are aimed at addressing weaknesses in the market, improving revenue collection and establishing a more financially sustainable system for electricity generation and distribution.
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