The federal government has pledged to address the N4 trillion debt owed to Power Generation Companies (GenCos) in the country.
In a statement Sunday evening, Bolaji Tunji, special adviser on Strategic Communication and Media Relations to the Minister of Power, Adebayo Adelabu, said this commitment follows high-stake talks between the minister and chairperson of GenCos.
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“The federal government has vowed to urgently address the N4 trillion debt crippling Nigeria’s power generation sector, following high-stakes talks between Power Minister Adebayo Adelabu and Chairmen of Generating Companies of Nigeria in Abuja on Tuesday. The move aims to avert an imminent collapse of the power infrastructure in the country,” the statement said.
Last month, GenCos warned of imminent shutdown due to a N4 trillion debt owed by the Nigerian government for electricity generated and supplied to the national grid.
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The firms said the debt, which includes N2 trillion for 2024 and N1.9 trillion in legacy debts, is threatening the continued operation of their power generation plants.
Mr Adelabu assured GenCos executives that the government would prioritise immediate payment of a significant amount out of the N4 trillion debt while the balance would be defrayed through other debt instruments.
He said this would be proposed in a meeting being planned between President Bola Tinubu and GenCos’ leadership.
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“There is a need to pay a substantial amount of the debt in cash. At the minimum, let us pay a substantial amount, then ask for a debt instrument in promissory notes to pay the rest,” Mr Adelabu was quoted as saying.
According to the statement, Mr Adelabu assured of the payment of the outstanding balance within six months through financial instruments such as promissory notes.
“We recognise the urgency of this matter. The government is committed to resolving this debt to stabilise the sector and prevent further crises. President Bola Tinubu would meet with GenCos leadership to fast-track the process,” he said.
The minister acknowledged the government’s role in the sector’s struggles, pledging to not only clear the debt but also implement reforms to ease operational bottlenecks.
He emphasised the need to fully liberalise the power sector, urging Nigerians to embrace cost-reflective tariffs.
The minister outlined plans to transition the sector toward sustainability, including regulatory reviews to reduce levies and enhance market stability.
He also urged GenCos to collaborate on advocacy efforts to educate Nigerians on efficient electricity use and tariff realities.
“Citizens must pay the appropriate price for the energy consumed. The federal government will continue to provide targeted subsidy for economically disadvantaged Nigerians. We have to understand that our economy cannot sustain subsidies indefinitely,” the minister said.
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The Chairperson of Egbin Power and First Independent Power Limited, Kola Adesina, said “This is a national emergency. Everything hinges on power—industries, homes, hospitals. We cannot afford to let the sector fail.”
The Association of Power Generation Companies (APGC) Managing Director/Chief Executive Officer Joy Ogaji detailed systemic challenges undermining GenCos, including chronic payment defaults, erratic gas supply, and foreign exchange volatility.
She noted that the naira’s plunge from N157/$1 in 2013 to N1,600/$1 had devastated maintenance budgets and loan repayments.
“GenCos have borne unsustainable risks—from grid failures to unproductive taxes—while remaining patriotic,” she said.
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