The Federal Government has initiated negotiations with electricity Generation Companies (Gencos) to develop a roadmap for the gradual settlement of the N4 trillion debt owed them.
This was disclosed in a statement by Bolaji Tunji, Special Adviser on Strategic Communications and Media Relations to the Minister of Power, Chief Adebayo Adelabu. The minister met with Gencos’ chairmen in Abuja to prevent the looming collapse of Nigeria’s power infrastructure caused by liquidity challenges.
Adelabu assured the Gencos that the government would prioritise the payment of a significant portion of the debt, while the remaining balance would be cleared using financial instruments such as promissory notes.
“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,” Adelabu said. He added that President Bola Tinubu is expected to meet with the Gencos’ leadership to fast-track the process.
The minister pledged that the debt would be fully addressed within six months and reaffirmed the government’s commitment to implementing reforms that would ease operational challenges in the sector.
He also called for the full liberalisation of the power sector and advocated for cost-reflective electricity tariffs. “Citizens must pay the appropriate price for the energy consumed. The federal government will continue to provide targeted subsidies for economically disadvantaged Nigerians,” he said, while urging public sensitisation to ensure compliance.
Chairman of Mainstream Energy Solutions and head of the Association of Power Generating Companies (APGC), Col. Sani Bello (rtd), led the Gencos’ delegation. He warned that the N4 trillion debt had pushed the sector to the brink, with companies unable to access loans or maintain infrastructure.
“Without urgent intervention, the entire power ecosystem could collapse,” he said.
Kola Adesina, Chairman of Egbin Power and First Independent Power Limited, described the situation as a national emergency. “Everything hinges on power—industries, homes, hospitals. We cannot afford to let the sector fail,” he said.
Dr. Joy Ogaji, Chief Executive Officer of APGC, highlighted the systemic challenges facing Gencos, including persistent payment defaults, unreliable gas supply, and currency volatility. She noted the steep devaluation of the naira from N157/$1 in 2013 to N1,600/$1 in 2024, which has crippled maintenance funding and debt servicing.
“Gencos have borne unsustainable risks—from grid failures to unproductive taxes—while remaining patriotic,” she added.
According to the statement, the minister also announced plans to reform regulatory policies, reduce levies, and enhance market stability. He called on the Gencos to join in advocacy campaigns to raise public awareness on efficient electricity use and tariff realities.
Nzubechukwu Eze.
