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President Bola Tinubu is set to meet with the leadership of Nigeria’s power Generation Companies (GenCos) following urgent talks between the Federal Government and electricity producers over the N4 trillion debt threatening to collapse the sector.
Adebayo Adelabu, minister of power, disclosed this on Tuesday after high-level discussions with GenCos executives in Abuja, where he assured them of the government’s commitment to resolving the debt crisis.
Adelabu stated that the government would immediately pay a substantial portion of the debt in cash while settling the remaining balance through financial instruments such as promissory notes within six months.
Read also: Transcorp Plc reels under N600bn power sector debt
“There is a need to pay a significant amount of the debt in cash. At the minimum, let us pay a substantial amount, then use debt instruments like promissory notes for the rest,” Adelabu said.
He emphasized that President Tinubu would engage directly with GenCos leadership to fast-track the process, adding, “We recognize the urgency of this matter. The government is committed to resolving this debt to stabilize the sector and prevent further crisis.”
GenCos Raise Alarm Over Liquidity Crisis
The GenCos delegation, led by Sani Bello, chairman of Mainstream Energy Solutions and the Association of Power Generating Companies (APGC), warned that the N4 trillion debt had pushed the sector to the brink of collapse.
Bello highlighted that liquidity challenges had left power producers unable to secure loans or maintain critical infrastructure. “Without urgent intervention, the entire power ecosystem could collapse,” he stressed.
Kola Adesina, chairman of Egbin Power and First Independent Power Limited, described the situation as a “national emergency,” stating, “Everything hinges on power—industries, homes, hospitals. We cannot afford to let the sector fail.”
Power Sector Reforms and Call for Cost-Reflective Tariffs
Adelabu acknowledged systemic issues in the sector, including chronic payment defaults, gas supply shortages, and foreign exchange volatility. He pledged reforms to ease operational bottlenecks while advocating for full liberalization of the power market.
Read also: CJN calls for judicial backing to drive power sector reforms
The minister urged Nigerians to embrace cost-reflective tariffs, noting that the government would only provide targeted subsidies for vulnerable citizens. “Citizens must pay the appropriate price for the energy they consume. Our economy cannot sustain subsidies indefinitely,” he said.
Joy Ogaji, CEO of APGC Power, detailed how the naira’s depreciation—from ₦157/1in2013to₦1,600/1in2013to₦1,600/1—had crippled GenCos’ ability to service loans and maintain equipment.
Oladehinde Oladipo
Dipo Oladehinde is a skilled energy analyst with experience across Nigeria’s energy sector alongside relevant know-how about Nigeria’s macro economy.
He provides a blend of market intelligence, financial analysis, industry insight, micro and macro-level analysis of a wide range of local and international issues as well as informed technical rudiments for policy-making and private directions.
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