The Federal Government has pledged urgent intervention to resolve the N4 trillion debt threatening Nigeria’s power generation sector. This followed a high-level meeting between the Minister of Power, Adebayo Adelabu, and Generation Companies (GenCos) executives in Abuja.
Debt Settlement Plan Underway
Adelabu assured GenCos that the government would pay a substantial portion of the debt immediately. He added that the balance would be cleared within six months using promissory notes. To fast-track the process, a meeting between President Bola Tinubu and GenCos is being planned.
“We must settle a major part of the debt in cash and use financial instruments for the rest,” Adelabu stated.
Col. Sani Bello (Rtd), Chairman of Mainstream Energy and the Association of Power Generation Companies (APGC), warned of serious consequences. He explained that the N4 trillion debt, comprising N2 trillion for 2024 and N1.9 trillion in legacy arrears,has left GenCos unable to access loans or carry out infrastructure maintenance.
“Without urgent government action, the entire power sector may collapse,” he said.
Industry Leaders Warn of Sector Collapse
Kola Adesina, Chairman of Egbin Power and First Independent Power Limited, described the crisis as a “national emergency.” He stressed that consistent electricity is vital for hospitals, homes, and industries.
Adelabu admitted the government’s role in the liquidity crisis and outlined new reforms. These include full market liberalization and cost-reflective tariffs. However, he assured Nigerians that targeted subsidies would protect the most vulnerable.
He also urged the public to embrace the true cost of electricity to keep the sector afloat.
Meanwhile, Dr. Joy Ogaji, CEO of APGC, outlined additional hurdles. She cited erratic gas supply, chronic payment delays, and currency instability as major obstacles to GenCos’ operations.
Currently, the government pays only 30% of GenCos’ monthly invoices. To restore stability, the Ministry of Power is working closely with the Ministry of Finance.
