The Nigerian Presidency has announced the commencement of processes to settle ₦2 trillion out of the ₦4 trillion legacy debts owed to electricity generation companies (GenCos) for power supplied to the national grid.
This development was disclosed at a Nigerian Electricity Supply Industry (NESI) stakeholders’ meeting organised by the Nigerian Electricity Regulatory Commission (NERC). Speaking on behalf of the Special Adviser to the President on Energy, Olu Verheijen, Eriye Onagoruwa confirmed that efforts are underway to clear a significant portion of the outstanding debts by the end of the next quarter.
According to Verheijen, the move is part of a broader strategy aimed at stabilising Nigeria’s struggling power sector, which has been plagued by operational challenges linked to unpaid debts. She further noted that the Federal Government is exploring alternative debt instruments to navigate current fiscal limitations.
Government Rallies Support for Debt Resolutiony
Verheijen revealed that both the Coordinating Minister of the Economy, Wale Edun, and the Debt Management Office (DMO) have expressed support for the initiative, with internal approval processes presently in progress.
“We’re empathetic to what GenCos are facing,” she stated via her representative, adding that while specific timelines could not be confirmed, substantial groundwork has been laid. “I hope by the next NESI meeting, I’ll be able to share a clear update,” Verheijen assured.
GenCos Warn of Operational Risks Amid Mounting Debts
This action follows growing concern from GenCos, who have repeatedly raised alarms over the Federal Government’s debt, which now exceeds ₦4 trillion — including ₦2 trillion accumulated in 2024 alone and ₦1.9 trillion in long-standing legacy debts. Operators have warned that the rising debt threatens the continued operation of power generation plants nationwide.
In February, the Minister of Power, Adebayo Adelabu, confirmed that the government owed over ₦4 trillion to both electricity generation and distribution companies. He acknowledged that the debt crisis was severely constraining the sector’s performance.
By April, Adelabu promised that the government was actively working to resolve the issue and restore financial stability within the power industry.
A Critical Step Towards Power Sector Reform
The planned debt payment represents a critical step in President Bola Tinubu’s ongoing efforts to revitalise Nigeria’s power infrastructure, enhance generation capacity, and improve the reliability of electricity supply across the country.
Industry experts and stakeholders have welcomed the move, expressing optimism that it will ease financial strain on GenCos and encourage fresh investments in the sector.
