The federal government has begun negotiation with power Generation Companies (Gencos) in Nigeria, with a view to setting out modalities for gradual payment of N4 trillion owed them.
A statement by Bolaji Tunji, the Special Adviser, Strategic Communications and Media Relations to the Minister of Power, Chief Adebayo Adelabu, stated that the move will help to urgently address the huge debt crippling Nigeria’s power generation sector.
According to him, Adelabu met with the Chairmen of Gencos in Abuja, aimed to avert an imminent collapse of the power infrastructure in the country.
The minister, according to the statement, assured the Gencos executives that the government would prioritise immediate payment of a significant amount out of the N4 trillion debt while the balance would be defrayed through other debt instruments.
He said this would be proposed in a meeting being planned between President Bola Tinubu and Gencos’ leadership.
“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 a debt instrument in promissory notes to pay the rest,” he added.
Adelabu assured of the payment of the outstanding balance within six months through financial instruments such as promissory notes.
“We recognise the urgency of this matter. The government is committed to resolving this debt to stabilise the sector and prevent further crisis,” Adelabu stated, adding that the president would meet with Gencos’ leadership to fast-track the process.
Adelabu acknowledged the government’s role in the sector’s struggles, pledging to not only clear the debt but also implement reforms to ease operational bottlenecks.
He emphasised the need for full liberalisation of the power sector, urging Nigerians to embrace cost-reflective tariffs. “Citizens must pay the appropriate price for the energy consumed. The federal government will continue to provide targeted subsidies for economically- disadvantaged Nigerians.
“We have to understand that our economy cannot sustain subsidies indefinitely,” he asserted, calling for public sensitisation campaigns to drive compliance.
The Gencos were led by Chairman of Mainstream Energy Solutions, who is also the Chairman of the Association of Power Generating Companies (APGC), Col. Sani Bello, who had earlier sounded the alarm over the sector’s dire state, citing the N4 trillion debt as a critical threat to operations.
He also warned that liquidity challenges had made Gencos unable to secure loans or maintain infrastructure. “Without urgent intervention, the entire power ecosystem could collapse,” he stressed.
Chairman of Egbin Power and First Independent Power Limited, Kola Adesina, who was also at the meeting, echoed the urgency of the matter.
“This is a national emergency. Everything hinges on power—industries, homes, hospitals. We cannot afford to let the sector fail,” he maintained.
Chief Executive of APGC, Dr. Joy Ogaji, detailed systemic challenges undermining Gencos, including chronic payment defaults, erratic gas supply, and foreign exchange volatility.
She noted that the naira’s plunge from N157/$1 in 2013 to N1,600/$1 had devastated maintenance budgets and loan repayments. “Gencos have borne unsustainable risks—from grid failures to unproductive taxes—while remaining patriotic,” she said.
According to the statement, the minister outlined plans to transition the sector toward sustainability, including regulatory reviews to reduce levies and enhance market stability. He also urged Gencos to collaborate on advocacy efforts to educate Nigerians on efficient electricity use and tariff realities.