President Bola Tinubu is set to meet with Nigeria’s power-generating companies (Gencos) to address the N4 trillion debt threatening the country’s electricity supply. This comes after a high-level meeting on Tuesday between the Minister of Power, Adebayo Adelabu, and Genco chairmen in Abuja, highlighting concerns about the national grid’s potential collapse due to liquidity issues in the sector, according to the power ministry’s statement on Sunday.
The government has committed to taking immediate steps to reduce the N4 trillion debt owed to Gencos. Reports earlier indicated that Gencos warned the Federal Government about the growing debt, which includes N2 trillion for power supplied in 2024 and N1.9 trillion in legacy debts.
Bolaji Tunji, Special Adviser to the Minister on Strategic Communications, explained that the government has vowed to pay a significant portion of the debt immediately. The remaining debt will be settled through financial instruments such as promissory notes within the next six months. This approach will be discussed at a meeting between President Tinubu and the Gencos’ leadership.
Adelabu stressed the need for immediate debt repayment in cash, with a portion settled through promissory notes. He emphasized that this issue was a national emergency and that the government was committed to resolving it to prevent further power sector crises.
Col. Sani Bello (retd), Chairman of Mainstream Energy Solutions and head of the Association of Power Generating Companies, warned that without intervention, the sector could collapse. He highlighted how the debt had crippled operations and limited funding for maintenance and infrastructure upgrades. Kola Adesina, Chairman of Egbin Power and First Independent Power Limited, echoed this concern, stressing the vital role power plays in the economy.
Adelabu acknowledged systemic failures and policy inconsistencies in the sector and emphasized the government’s focus on debt repayment alongside reforms. He advocated for the full liberalization of the electricity market and cost-reflective tariffs, noting that subsidies were no longer sustainable. “Citizens must pay the appropriate price for the energy consumed, while the government will continue to provide targeted subsidies for economically disadvantaged Nigerians,” he said.
Dr. Joy Ogaji, CEO of APGC, also discussed challenges such as erratic gas supply, payment defaults, and foreign exchange volatility. She pointed out the impact of the naira’s depreciation, from N157/$1 in 2013 to N1,600/$1, on maintenance budgets and loan repayments. Adelabu revealed plans to implement regulatory reforms to enhance market stability, reduce levies, and encourage public awareness of electricity consumption, efficient usage, and tariff realities.
