President Bola Tinubu is set to hold a crucial meeting with the leadership of Nigeria’s power-generating companies (Gencos) as part of emergency efforts to address the N4 trillion debt threatening to paralyze the country’s power supply chain.
This development follows a high-level session held on Tuesday between the Minister of Power, Adebayo Adelabu, and Genco chairmen in Abuja. The meeting was convened amid growing concerns over a possible national grid collapse due to deepening liquidity constraints, according to a Sunday statement from the Federal Ministry of Power.
The Federal Government has pledged urgent action to ease the N4tn burden, which includes N2tn owed for power supplied in 2024 and N1.9tn in legacy debts.
In a statement issued by Bolaji Tunji, Special Adviser on Strategic Communications and Media Relations to the Minister, it was revealed that the government intends to settle a significant portion of the debt immediately, with the remainder to be cleared through financial instruments such as promissory notes over the next six months.
“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 debt instruments in promissory notes to pay the rest,” Adelabu said, noting that this proposal will be discussed in the upcoming meeting with President Tinubu and Gencos’ leadership.
Adelabu described the situation as a “national emergency” and emphasized the Federal Government’s resolve to stabilise the power sector. “We recognise the urgency of this matter. The government is committed to resolving this debt to stabilise the sector and prevent further crisis,” he said. However, no exact date has been fixed for the presidential meeting, as consultations are still ongoing.
Leading the Gencos’ delegation was Col. Sani Bello (retd), Chairman of Mainstream Energy Solutions and the Association of Power Generating Companies. Bello warned that the debt and persistent liquidity issues had severely crippled operations and restricted access to funding for essential maintenance and infrastructure upgrades. “Without urgent intervention, the entire power ecosystem could collapse,” he cautioned.
Similarly, Kola Adesina, Chairman of Egbin Power and First Independent Power Limited, stressed the far-reaching consequences of a failing power sector. “This is a national emergency. Everything hinges on power—industries, homes, hospitals. We cannot afford to let the sector fail,” he said.
Adelabu acknowledged that systemic inefficiencies and inconsistent policies have worsened the sector’s crisis. He reiterated that while debt repayment is a priority, the government is equally focused on implementing sectoral reforms to improve operations.
He advocated for a fully liberalised electricity market and urged Nigerians to adopt cost-reflective tariffs, stating that widespread subsidies are no longer sustainable. “Citizens must pay the appropriate price for the energy consumed. The Federal Government will continue to provide targeted subsidy for economically disadvantaged Nigerians,” Adelabu explained.
Dr. Joy Ogaji, CEO of the Association of Power Generating Companies (APGC), outlined additional challenges confronting Gencos, including erratic gas supply, payment defaults, and foreign exchange volatility. She highlighted the impact of the naira’s steep depreciation—from N157/$1 in 2013 to N1,600/$1—on operations, particularly maintenance and debt servicing.
“Gencos have borne unsustainable risks—from grid failures to unproductive taxes—while remaining patriotic,” Ogaji said.
Adelabu concluded by noting that regulatory reforms are in progress to enhance market stability and reduce excessive levies. He called on the Gencos to support the government in driving public education on electricity use, efficient consumption, and the reality of tariff adjustments.
ADEOLA KUNLE
