President Bola Ahmed Tinubu is set to hold a crucial meeting with the leadership of Nigeria’s Power Generation Companies (GenCos) to address a staggering N4 trillion debt threatening the stability of the nation’s electricity sector.
This was disclosed in a statement by Mr. Bolaji Tunji, Special Adviser on Strategic Communications and Media Relations to the Minister of Power, Mr. Adebayo Adelabu. The meeting, according to the statement, is aimed at developing a viable strategy for resolving the long-standing debt burden.
Minister Adelabu assured that the Federal Government would immediately pay a substantial portion of the debt, with the remaining balance to be cleared within six months using financial instruments such as promissory notes. He acknowledged the urgency of the situation, noting that the government is committed to stabilising the sector and averting further crises.
Recognising the government’s role in the sector’s challenges, Adelabu promised not only to address the debt backlog but also to implement structural reforms aimed at removing operational bottlenecks. He stressed the need for the full liberalisation of the power sector and advocated for the adoption of cost-reflective tariffs, adding that while subsidies would continue for economically vulnerable Nigerians, the economy could no longer sustain blanket subsidies.
Adelabu also revealed plans to review current regulations to reduce levies and improve market stability. He called on GenCos to collaborate with the government in increasing public awareness about efficient electricity usage and the realities of electricity tariffs.
The GenCos delegation at the meeting was led by Sani Bello, Chairman of Mainstream Energy Solutions and Chairman of the Association of Power Generating Companies. Bello warned that persistent liquidity issues had left GenCos unable to service debts or maintain critical infrastructure, cautioning that the entire power ecosystem could collapse without urgent intervention.
Kola Adesina, Chairman of Egbin Power and First Independent Power Limited, described the situation as a national emergency. He emphasized that a stable power supply is essential for the survival of industries, homes, and health services across the country.
Mrs. Joy Ogaji, CEO of the Association of Power Generation Companies, highlighted systemic issues plaguing the GenCos, including chronic payment defaults, erratic gas supply, and foreign exchange instability. She noted the naira’s dramatic depreciation from ₦157/$1 in 2013 to ₦1,600/$1 in 2024, which has severely impaired the companies’ ability to maintain operations and service loans.
Ogaji lamented that despite the mounting challenges, GenCos had continued to operate under unsustainable conditions, facing risks from grid failures to excessive taxation, all while remaining committed to national service.