President Bola Tinubu is set to hold a critical meeting with the leadership of Nigeria’s power generation companies (GenCos) amid growing fears that a staggering N4 trillion debt could plunge the country’s electricity supply chain into chaos.
The planned meeting comes on the heels of a high-level session last week between the Minister of Power, Adebayo Adelabu, and the chairmen of major GenCos in Abuja. The gathering was convened to urgently address mounting liquidity issues that threaten the stability of the national grid.
Adebayo Adelabu confirmed that the Federal Government will move quickly to settle a substantial portion of the debt. “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,” the minister said.
The total debt includes N2 trillion owed for electricity supplied in 2024 and N1.9 trillion in outstanding legacy debts. Adelabu noted that while cash payments will be prioritized, the balance will be cleared through financial tools such as promissory notes within six months.
“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, describing the current situation as a “national emergency.”
The government’s engagement with GenCos is not limited to debt repayment. Adelabu said the administration was determined to implement deep structural reforms in the power sector, citing regulatory changes, policy realignment, and market liberalization as key priorities.
He also stressed the need for Nigerians to accept cost-reflective electricity tariffs, saying, “Citizens must pay the appropriate price for the energy consumed. The Federal Government will continue to provide targeted subsidy for economically disadvantaged Nigerians. We have to understand that our economy cannot sustain subsidies indefinitely.”
During the meeting with Adelabu, GenCos sounded the alarm about the deteriorating state of the industry, citing a lack of access to financing, operational paralysis, and long-overdue government payments.
Col. Sani Bello (retd), Chairman of Mainstream Energy Solutions and head of the Association of Power Generating Companies (APGC), issued a stark warning: “Without urgent intervention, the entire power ecosystem could collapse.” He emphasized that the rising debt had not only crippled operations but also made it impossible for GenCos to secure loans or carry out critical maintenance.
Kola Adesina, Chairman of Egbin Power and First Independent Power Limited, echoed those concerns. “This is a national emergency. Everything hinges on power—industries, homes, hospitals. We cannot afford to let the sector fail,” he said.
Dr. Joy Ogaji, CEO of the APGC, outlined several longstanding challenges undermining power generation in Nigeria, including erratic gas supply, inconsistent government policies, and foreign exchange volatility. “Gencos have borne unsustainable risks—from grid failures to unproductive taxes—while remaining patriotic,” she said.
She added that the naira’s sharp depreciation—from N157/$1 in 2013 to N1,600/$1 in 2024—has decimated GenCos’ ability to maintain infrastructure and service foreign-denominated loans.
In response, Adelabu stated that the government was already working on regulatory adjustments aimed at enhancing market stability and lowering excessive levies. He also encouraged GenCos to partner with the government in educating the public on electricity usage and the realities of the current tariff structure.
“The president will meet with the GenCos’ leadership to fast-track the process,” Adelabu affirmed.
The outcome of this anticipated meeting could determine whether Nigeria’s fragile electricity ecosystem receives a lifeline or slides further into dysfunction.
