The Nigerian Presidency has initiated internal approval processes aimed at resolving the longstanding N2 trillion debt owed to electricity generation companies (GenCos), with hopes of settling the issue before the end of the next quarter. This effort is part of a broader strategy to stabilise Nigeria’s power sector, which has been hampered by financial constraints and mounting liabilities. The announcement was made by a representative of the Special Adviser to the President on Energy during the 2025 Nigerian Electricity Supply Industry Stakeholders Meeting.
The debt has severely affected GenCos, limiting their ability to provide consistent electricity supply nationwide. Due to the Federal Government’s current fiscal challenges, alternative debt instruments are being considered to address the crisis. Coordination between the Economy Ministry and the Debt Management Office is ongoing to ensure progress, with expectations of a more detailed update in the next three months.
Meanwhile, the power sector continues to face liquidity issues, with the Senate Committee on Power revealing that government payments to electricity producers have stalled this year, causing debts to swell to over N800 billion. The committee warned that monthly tariff shortfalls mean the government owes roughly N200 billion to GenCos every month, exacerbating the financial strain.
The stakeholders’ meeting gathered regulators, operators, and policymakers to discuss key reforms, including the Presidential Metering Initiative, the Meter Asset Fund, and the creation of the Nigerian Independent System Operator (NISO). Discussions also focused on managing sector decentralisation to prevent market fragmentation, with NISO tasked to lead efforts in harmonising policy and operations amid these changes.
Overall, the intervention by the Presidency and ongoing sector reforms have been welcomed by stakeholders as vital steps toward repositioning Nigeria’s electricity industry for future sustainability. With reforms underway and financial clarity anticipated soon, the power sector looks poised for significant improvement in addressing its chronic challenges.