N4 trillion debt: Tinubu to meet GENCOs

President Bola Ahmed Tinubu is to hold a crucial meeting with leaders of Nigeria’s electricity generation companies as part of steps to address the N4 trillion debt threatening the country’s electricity supply chain. 

This development follows a high-level meeting held last Tuesday between the Minister of Power, Adebayo Adelabu, and the chairmen of the power firms in Abuja. According to a statement from the Ministry of Power released on Sunday, concerns are rising over a potential collapse of the national grid due to severe financial constraints facing the sector.

The Federal Government has now promised swift intervention to address the massive debt owed to the power companies. It was earlier reported that the Gencos warned the government about the worsening debt crisis, with the companies claiming they are owed N2 trillion for electricity supplied in 2024 and an additional N1.9 trillion in old, unsettled debts.

In a statement issued by Bolaji Tunji, Special Adviser to the Minister on Strategic Communications and Media Relations, the government confirmed it would pay a significant part of the debt immediately. The rest, it said, would be settled using promissory notes within six months, with this proposal expected to be finalised during the planned meeting between President Tinubu and the power company executives.

Adelabu stressed the government’s commitment to preventing a collapse in the sector, describing the situation as a national emergency. “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.

While the exact date for the meeting with the president was not disclosed, Tinji noted that discussions were ongoing among stakeholders to finalise arrangements.

The chairman of Mainstream Energy Solutions and head of the Association of Power Generating Companies, Col. Sani Bello (retd), who led the Gencos delegation, cautioned that the mounting debt had crippled their operations and restricted access to funds needed for infrastructure and system upgrades. “Without urgent intervention, the entire power ecosystem could collapse,” he warned.

Also speaking, Kola Adesina, Chairman of Egbin Power and First Independent Power Limited, echoed the concerns, describing the situation as a national emergency. “Everything in Nigeria depends on power—industries, homes, hospitals. We cannot afford for this sector to fail,” he said.

Adelabu admitted that policy inconsistencies and systemic problems had worsened the sector’s troubles, noting that beyond settling debts, the government was determined to pursue reforms to ease the challenges facing operators. He advocated for full liberalisation of the electricity market and insisted that Nigerians must begin paying cost-reflective tariffs, stressing that the current subsidy system was unsustainable. However, he assured that the government would continue providing targeted support for the poor.

On her part, Dr. Joy Ogaji, CEO of the Association of Power Generating Companies (APGC), listed the major issues affecting Gencos, including unstable gas supply, delayed payments, and the effect of foreign exchange instability. She noted that the naira’s fall from N157 to N1,600 against the dollar since 2013 had made it difficult for operators to meet maintenance and loan obligations.

“Gencos have carried unbearable risks—from grid failures to excessive taxes—while staying committed to Nigeria,” she stated.

Adelabu disclosed that fresh regulatory reforms were being planned to improve market stability and reduce levies in the sector. He also called on power companies to collaborate with the government in sensitising the public about responsible electricity consumption, efficient use, and the realities of pricing in the power sector.