President Bola Tinubu is set to hold an emergency meeting with the leadership of Nigeria’s power generation companies to tackle the worsening N4 trillion debt threatening the country’s electricity sector.
This follows a high-level meeting on Tuesday between the Minister of Power, Adebayo Adelabu, and the chairmen of various Gencos in Abuja. The session, held amid mounting concern over the potential collapse of the national grid due to severe liquidity constraints, prompted urgent commitments from the Federal Government, according to a statement released on Sunday by the power ministry.
During the meeting, the government pledged immediate action to reduce the mounting debt, which the Gencos have consistently warned could cripple electricity supply if unresolved.
The firms were owed N2 trillion for electricity supplied in 2024, in addition to N1.9 trillion in legacy debts, totalling N3.9 trillion .
The statement, issued by Bolaji Tunji, Special Adviser on Strategic Communications and Media Relations to the minister, revealed that the government had resolved to pay a significant portion of the debt immediately. The balance, it said, would be settled through financial instruments such as promissory notes over a six-month period.
“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 stated.
He described the situation as a “national emergency,” stressing the urgency of government intervention. “We recognise the urgency of this matter. The government is committed to resolving this debt to stabilise the sector and prevent further crisis,” he added.
While the date for President Tinubu’s meeting with the Gencos has yet to be finalised, Adelabu’s aide confirmed that discussions are ongoing among key stakeholders.
The Gencos were represented at the meeting by Col. Sani Bello (retd), Chairman of Mainstream Energy Solutions and head of the Association of Power Generating Companies. Bello painted a grim picture of the situation, warning that the sector was on the brink of collapse due to the mounting debt and continued liquidity strain.
“Without urgent intervention, the entire power ecosystem could collapse,” Bello warned, explaining that the debts had severely limited the companies’ ability to carry out maintenance and make essential infrastructure investments.
Reinforcing this sentiment, Kola Adesina, Chairman of Egbin Power and First Independent Power Limited, declared, “This is a national emergency. Everything hinges on power—industries, homes, hospitals. We cannot afford to let the sector fail.”
Minister Adelabu admitted that systemic issues and policy inconsistencies had contributed to the crisis. He said the Federal Government’s commitment extended beyond settling debts, pointing to broader reforms aimed at easing operational difficulties.
He called for full liberalisation of the electricity market and advocated the adoption of cost-reflective tariffs, while promising continued support for low-income Nigerians through targeted subsidies.
“Citizens must pay the appropriate price for the energy consumed. The Federal Government will continue to provide targeted subsidy for economically disadvantaged Nigerians,” he noted.
CEO of the Association of Power Generating Companies, Dr Joy Ogaji, outlined the critical challenges plaguing the industry. These include erratic gas supply, persistent payment defaults, and forex volatility, which have made maintenance and loan repayments increasingly difficult.
“Gencos have borne unsustainable risks—from grid failures to unproductive taxes—while remaining patriotic,” Ogaji stated, citing the naira’s depreciation from N157/$1 in 2013 to about N1,600/$1 as a major setback to operations.
Adelabu also disclosed that regulatory reforms were being considered to improve market stability and reduce excessive levies. He urged the Gencos to work with the government in sensitising the public about electricity use, pricing, and efficiency.
Efforts to stabilise the power sector, the minister said, will require the cooperation of all stakeholders—including consumers, regulators, and the private sector.
