How Nigeria will share its electricity subsidy
The federal government explained how it intends to share N 65 bn electricity subsidy it approved under the Multi-Year
Tariff Order (MYTO) for operators in the industry.
The MYTO is the new tariff regime for the electricity industry which was approved for implementation from July 1,
2008. The N 65 bn is for the 2008/2009 period.
Eight months after, no money has been released under the scheme to any operator in the industry, but sources
confirmed that the money is now available at the Central Bank of Nigeria.
A statement from the ministry of power said the money will be shared among the Generation Companies both Governments
owned and IPPs; the Transmission Company of Nigeria, TCN, that is responsible for wheeling electricity from
generators to distributors and the 11 distribution companies that are responsible for delivering electricity to
consumers and revenue collection; and administrative and regulatory agencies including PHCN and NERC.
The statement signed by the Chief Press Secretary of the Ministry, Mrs Olubunmi A. Badejo, said the payment
arrangement is to ensure efficient and effective utilization of the MYTO subsidy. It said the Minister of Power,
Rilwan Babalola has approved that the MYTO subsidy shall be domiciled with the CBN but under the custody of the
Federal Ministry of Power.
"On a monthly basis, the Market Operator (MO), under the aegis of TCN shall calculate subsidy requirements of each of
the 11 distribution companies in line with the energy delivered and collection efficiency and submit same to the
Federal Ministry of Power for approval."
