By Adewale Sanyaolu and Isaac Anumihe (Abuja)
To avoid an impending collapse of Nigeria’s power infrastructure, President Bola Tinubu is to meet the power generating companies (GenCos) over the subsisting N4 trillion debt, even as the federal government has promised to settle it through a phased settlement format.
The debt comprises monies owed to power generating firms (GenCos), which is crippling Nigeria’s power generation sector, following high-stakes talks.
A statement released yesterday, which quoted the Minister of Power, Mr. Adebayo Adelabu, said he gave the assurance during a stakeholder meeting with the chairmen of GenCo companies in Abuja.
The Minister 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 Ahmed Tinubu and the GenCos’ leadership.
“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.”
He assured 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 stabilize the sector and prevent further crisis,” Adelabu stated, adding that President Bola Tinubu would meet with GenCos leadership to fast-track the process.
The GenCos were led by the Chairman of Mainstream Energy Solutions, who is also the Chairman of the Association of Power Generating Companies (APGC), Col. Sani Bello, who had earlier sounded the alarm over the sector’s dire state, citing the N4 trillion debt as a critical threat to operations. He also warned that liquidity challenges had left GenCos unable to secure loans or maintain infrastructure.
“Without urgent intervention, the entire power ecosystem could collapse,” he stressed.
Kola Adesina, Chairman of Egbin Power and First Independent Power Limited, echoed the urgency: “This is a national emergency. Everything hinges on power — industries, homes, hospitals. We cannot afford to let the sector fail.”
Adelabu 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 emphasized the need for full liberalisation of the power sector, urging Nigerians to embrace cost-reflective tariffs.
“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,” he asserted, calling for public sensitisation campaigns to drive compliance.
Dr. Joy Ogaji, CEO of APGC Power, 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.
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.