President Bola Tinubu is taking urgent steps to prevent a potential collapse of Nigeria’s power sector by addressing the staggering N4 trillion debt owed to electricity generation companies (GenCos). In an upcoming meeting with GenCo leadership, Tinubu is expected to outline a phased repayment strategy that prioritizes immediate cash disbursement and long-term financial instruments such as promissory notes. This development follows warnings from stakeholders that the mounting debt threatens the stability of the country’s entire power ecosystem.
During a recent stakeholder meeting in Abuja, Minister of Power Adebayo Adelabu assured GenCo executives of the federal government’s commitment to settling a substantial portion of the debt promptly. He emphasized that the balance would be handled through structured financial tools over the next six months. The meeting included leaders like Col. Sani Bello of Mainstream Energy and Kola Adesina of Egbin Power, who both underscored the urgency of government action, warning of a nationwide blackout if liquidity challenges persist.
In addition to resolving the debt crisis, Adelabu acknowledged the federal government’s role in existing inefficiencies and pledged comprehensive reforms. These include fully liberalizing the power sector and promoting cost-reflective tariffs to ensure long-term sustainability. He stressed that while targeted subsidies for vulnerable citizens will continue, the economy can no longer sustain blanket energy subsidies. Public education and sensitization campaigns were also proposed to improve consumer understanding and compliance.
Dr. Joy Ogaji, CEO of the Association of Power Generating Companies, highlighted structural issues plaguing GenCos, such as erratic gas supply, currency devaluation, and excessive taxation. These challenges, she argued, have made operations increasingly untenable despite the sector’s patriotic efforts. To address this, the federal government plans regulatory overhauls aimed at reducing levies and stabilizing the energy market. GenCos were also encouraged to spearhead advocacy efforts on energy conservation and tariff awareness.
Source: The sun