President Bola Tinubu is set to hold a high-level meeting with the leadership of Nigeria’s power generation companies (GenCos) to address the over N4 trillion debt owed to them by the Federal Government.
The Minister of Power, Adebayo Adelabu, disclosed this in a statement issued on Sunday in Abuja by his Special Adviser on Strategic Communications and Media Relations, Bolaji Tunji.
According to the statement, the meeting aims to find a mutually agreeable solution to the lingering debt crisis threatening the stability of Nigeria’s electricity supply chain.
Adelabu assured stakeholders that the Federal Government is committed to immediately offsetting a significant portion of the debt. He added that the remaining balance will be addressed through structured financial instruments, including promissory notes, within a six-month timeline.
According to Adelabu, the government was not oblivious to the critical role the GenCos play in the sector.
This administration, he stated, is ready to resolve legacy issues affecting power generation and payment shortfalls.
The minister acknowledged that the government has contributed to the operational inefficiencies plaguing the power sector.
Reforms, Cost-Reflective Tariffs on the Horizon
He reiterated the need for urgent reforms to eliminate systemic bottlenecks and create a more viable and self-sustaining power value chain.
He further advocated for the complete liberalisation of the power sector, emphasising that Nigerians must begin to embrace cost-reflective tariffs to ensure long-term sustainability. However, he reassured that the most vulnerable populations would continue to receive targeted subsidies to cushion the impact.
GenCos warn of Sector Collapse
The financial strain on GenCos has reached alarming levels, with industry stakeholders warning of a potential collapse of the entire electricity ecosystem if liquidity issues persist.
- Col. Sani Bello (Rtd), a key GenCo stakeholder, warned that the sector was approaching a breaking point. Echoing his concerns, Mr. Kola Adesina, Chairman of Egbin Power Plc, described the situation as nothing short of a national emergency.
- In her remarks, Joy Ogaji, Chief Executive Officer of the Association of Power Generation Companies (APGC), highlighted multiple challenges facing the operators, including persistent payment defaults, erratic gas supply, and the depreciating value of the naira.
- Adelabu urged GenCos to work collaboratively with the Federal Government in sensitising Nigerians on electricity consumption, billing, and the true cost of power generation. He noted that only a concerted effort involving government, operators, and consumers can lead to the long-awaited reform and stabilisation of the sector.
The meeting between the President and the GenCos is expected to set the tone for critical decisions that could shape the future of electricity generation and delivery in Nigeria.
More insights
In March 2025, the Managing Director of the Niger Delta Power Holding Company (NDPHC), Jennifer Adighije called for urgent presidential intervention to secure funding for ongoing power projects and settle outstanding payments owed to Generation Companies (GenCos), as part of efforts to improve electricity supply across Nigeria.
Adighije highlighted the severe liquidity challenges facing the power sector, with over N4 trillion owed to GenCos, which has hindered their ability to operate efficiently.
