President Bola Tinubu has approved N2.8 trillion as the Federal Government’s verified debt to Nigeria’s power generation companies (GenCos), sharply cutting down their N6 trillion claim. The decision follows months of negotiations and a detailed audit process, signaling what presidency sources describe as a firm stance against inflated subsidy demands. According to insiders, Tinubu insisted he would not approve “a naira beyond the audited figure,” drawing parallels to past controversies surrounding fuel subsidy claims.
The approval came after a tripartite audit involving the Ministry of Finance, the Nigerian Bulk Electricity Trading Plc, and the GenCos themselves. While operators initially pushed for N6 trillion—later rising to N6.6 trillion in public disclosures—the audit reportedly verified N2.8 trillion as legitimate accumulated liabilities dating back to 2010. Sources familiar with the negotiations said the President demanded a transparent breakdown of invoices before committing public funds.
As a show of good faith during the audit process, the Federal Government raised N501 billion in January through a bond under the Presidential Power Sector Debt Reduction Programme. The bond was fully subscribed by pension funds, banks, and asset managers, reflecting investor confidence. Officials explained that the payment was meant to ease liquidity pressures on GenCos while talks continued over the final figure.
The power sector debt crisis traces back to the 2013 privatisation of electricity assets, when generation and distribution companies were sold for about N400 billion. Since then, regulated tariffs, foreign exchange challenges, and liquidity shortfalls have left operators struggling with unpaid invoices. The Nigeria Labour Congress had earlier criticised any large-scale bailout, questioning why companies that bought assets for billions should receive trillions in public support without significantly improving electricity output, which still fluctuates between 2,000 and 5,000 megawatts.
To prevent misuse of funds, Tinubu has reportedly attached strict conditions to the N2.8 trillion payment. A significant portion must be used to settle outstanding gas supply debts—long blamed for recurring national grid collapses—and to reinvest in infrastructure upgrades. The Presidency also plans to release an additional N600–N800 billion between May and July, bringing total payments to roughly half of the approved sum by mid-year, with the balance spread over 12 to 24 months. For millions of Nigerians enduring unstable power supply, the hope is that this financial reset will finally translate into more reliable electricity rather than another cycle of debt and disappointment.
source: punch