…says electricity subsidy no longer sustainable
The Minister of Power, Adebayo Adelabu, has said that Nigerians must begin to pay the appropriate price for the electricity they consume, as the Federal Government can no longer sustain the huge cost of subsidising electricity.
Speaking during a meeting with the chairmen of Electricity Generating Companies (GenCos) in Abuja, Adelabu disclosed that the government’s outstanding subsidy debt has surged beyond N4 trillion — a burden he warned is threatening the stability of the entire power sector.
Adelabu said although the government would continue to support vulnerable Nigerians through targeted subsidies, it was clear that the current subsidy system is unsustainable.
“We have to understand that our economy cannot sustain subsidies indefinitely. Citizens must pay the appropriate price for the energy consumed,” he said.
To address the mounting debt owed to GenCos, the minister disclosed that the government is considering a hybrid repayment plan that includes both cash payments and promissory notes.
This proposal is expected to be presented at a forthcoming meeting 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,” Adelabu said.
During the meeting, Col. Sani Bello (retd.), Chairman of Mainstream Energy Solutions, raised concerns over the N4 trillion debt, warning that it has crippled GenCos’ ability to secure credit or maintain infrastructure.
“Without urgent intervention, the entire power ecosystem could collapse,” he warned.
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, CEO of the Association of Power Generating Companies, outlined major challenges facing the sector, including persistent payment defaults, unreliable gas supply, and exchange rate volatility.
She noted that the naira’s plunge from N157/$1 in 2013 to about N1,600/$1 today has severely impacted GenCos’ ability to service loans and maintain operations.
“GenCos have borne unsustainable risks—from grid failures to unproductive taxes—while remaining patriotic,” she added.
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