FG set to settle N4trn power sector debt

The Federal Government has vowed to urgently address the N4 trillion debt crippling Nigeria’s power generation sector, following high-stakes talks between the Minister of Power, Adebayo Adelabu, and the chairmen of Generating Companies of Nigeria (GenCos) in Abuja. The move aims to avert the imminent collapse of the country’s power infrastructure.

Adelabu assured GenCos executives that the government would prioritize the immediate payment of a significant portion of the N4 trillion debt, while the balance would be addressed through other debt instruments. According to the minister, this will be proposed in a meeting being planned between President Bola Ahmed Tinubu and GenCos’ leadership.

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“There is a need to pay a substantial amount of the debt in cash. At the minimum, let us pay a significant amount, then request debt instruments in the form of promissory notes to cover the rest,” the minister said.

He assured the payment of the outstanding balance within six months through financial instruments such as promissory notes.

“We recognize the urgency of this matter. The government is committed to resolving this debt to stabilize the sector and prevent further crises,” 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), Colonel Sani Bello. He 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.

Bello said, “Without urgent intervention, the entire power ecosystem could collapse.”

Chairman of Egbin Power and First Independent Power, Kola Adesina, echoed the urgency when he said, “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 not only to clear the debt but also to implement reforms to ease operational bottlenecks. He emphasized the need for the full liberalization 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 subsidies for economically disadvantaged Nigerians. We must understand that our economy cannot sustain subsidies indefinitely,” he asserted, calling for public sensitization campaigns to drive compliance.

The CEO of APGC, Dr. Joy Ogaji, detailed the systemic challenges undermining GenCos, including chronic payment defaults, erratic gas supply, and foreign exchange volatility. She noted that the naira’s plunge from ₦157/$1 in 2013 to ₦1,600/$1 has 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.