The Federal Government has opened negotiations with power generation companies (Gencos) in a bid to address the N4 trillion debt crippling the country’s electricity sector.
According to a statement by Bolaji Tunji, Special Adviser on Strategic Communications and Media Relations to the Minister of Power, Chief Adebayo Adelabu, the talks aim to develop a phased payment plan that will stabilise the sector and avert a total collapse of the national power infrastructure.
The meeting, held in Abuja, brought together the Minister and the Chairmen of various Gencos, amid growing concerns over the sustainability of power generation in the country.
Adelabu assured the Gencos that the government would prioritise an immediate cash payment of a substantial portion of the debt, while the remainder would be cleared through financial instruments such as promissory notes. He said this proposal would be tabled in a forthcoming meeting between President Bola Tinubu and 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,” Adelabu said.
He pledged that the debt would be fully settled within six months and reaffirmed the government’s commitment to reforms that would ease operational challenges in the sector.
Adelabu also called for a full liberalisation of the power sector and the adoption of cost-reflective tariffs, noting that targeted subsidies would remain for the most vulnerable Nigerians. “Our economy cannot sustain blanket subsidies indefinitely,” he said, urging for public awareness campaigns to boost compliance and understanding.
The Gencos, led by Col. Sani Bello (rtd), Chairman of Mainstream Energy Solutions and the Association of Power Generating Companies (APGC), expressed alarm over the sector’s dire financial state. Bello noted that the massive debt had hampered access to credit and hindered infrastructure maintenance, warning of a possible collapse of the power ecosystem without urgent intervention.
Other executives at the meeting, including Kola Adesina, Chairman of Egbin Power and First Independent Power Limited, described the situation as a national emergency, stressing the importance of stable power for homes, hospitals, and industries.
Dr. Joy Ogaji, APGC Chief Executive, highlighted longstanding issues such as chronic payment defaults, unreliable gas supply, and foreign exchange volatility. She explained that the naira’s steep decline—from N157/$1 in 2013 to N1,600/$1—had severely affected Gencos’ ability to maintain operations and repay loans.
In response, Adelabu outlined plans for regulatory reform, including reducing levies and promoting market stability. He also encouraged Gencos to partner with the government in sensitising the public on efficient electricity use and the need for tariff reforms.
Nzubechukwu Eze.
