The Federal Government is yet to initiate talks with Nigeria’s power generation companies (GenCos) over the ₦4.7 trillion debt owed to them, despite a promise by the Ministry of Power that President Bola Tinubu would personally meet with them nearly two months ago.
In June, the Special Adviser to the President on Energy, Olu Verheijen, announced plans to settle ₦2 trillion of the total debt by the end of the next quarter. However, no steps have been taken since then to begin discussions with the affected companies, according to findings.
The Association of Power Generation Companies confirmed that there has been no official communication from the Federal Government, nor has a meeting date been set. Speaking with journalists, the association’s Chief Executive Officer, Joy Ogaji, stated, “Not yet. We are still waiting.”
This delay follows a high-level meeting in May between the Minister of Power, Adebayo Adelabu, and GenCos’ chairmen, where immediate action was promised to prevent a collapse of Nigeria’s power grid due to growing financial constraints. At that time, the minister assured the stakeholders that a meeting with President Tinubu was being arranged and that part of the debt would be paid promptly, with the remainder handled through promissory notes over six months.
As of July 1, no payments have been made and no meeting has been scheduled. Ogaji reiterated the urgency of the matter, noting that the GenCos had already outlined their needs in a formal letter to the government.
The GenCos are currently battling critical challenges, including erratic gas supply, depreciating exchange rates, and non-payment for electricity supplied to the national grid. According to Ogaji, the naira’s slide from ₦157 to over ₦1,600 per dollar since 2013 has severely affected operational budgets and loan obligations.
The Ministry of Power, however, insists the proposed meeting is still in the works. A media aide to the minister, Bolaji Tunji, said once a date is set, the GenCos will be informed.
Previously, the GenCos warned of potential shutdowns if the Federal Government does not clear outstanding payments, which include ₦2 trillion owed for electricity supplied in 2024 and ₦1.9 trillion in legacy debts.
Adelabu acknowledged the severity of the situation, emphasizing the need to pay a substantial amount in cash, supplemented by debt instruments. “Let us pay a substantial amount, then ask for promissory notes to pay the rest,” he stated.
Industry data reveals the scale of the crisis: Generation Companies issued invoices worth ₦2.7 trillion from January to December 2024 but received only ₦762.1 billion, recovering just 28.18% of the debt. This leaves an outstanding ₦1.94 trillion for the year alone.
Transcorp Power, for instance, disclosed it is owed over ₦650 billion and warned that financial shortfalls are stalling expansion plans. Each month, another ₦200 billion is added to the sector’s debt burden.
With thermal plants relying heavily on gas, GenCos are struggling to pay gas suppliers, threatening the stability of Nigeria’s already fragile power sector. Stakeholders warn that unless the Federal Government takes immediate action, power generation capacity may drop drastically, worsening electricity access across the country.
Many industry players are questioning the viability of clearing ₦4.7 trillion in debts with a sectoral budget of just ₦900 billion, raising concerns about the sustainability of Nigeria’s power supply going forward.
