Nigeria’s Power Sector Gets N3.3 Trillion Lifeline as Eight GenCos Sign Debt Bailout

Eight of Nigeria’s major power generation companies, including Transcorp Power, Egbin Power, and Geregu Power Plc, have signed onto President Bola Tinubu’s N3.3 trillion debt settlement program, signaling a major push to stabilize the country’s ailing electricity sector. The agreement covers 15 power plants across six private companies and two state-owned entities, marking the most ambitious effort by any Nigerian government to address years of financial strain in the energy value chain.

Egbin Power Plc, Nigeria’s largest generating station with 1,320 megawatts capacity in Lagos, stands out as the most significant signatory. Geregu Power Plc in Kogi State, along with Transcorp Delta and Afam Power—both part of Tony Elumelu’s Transnational Corporation group—also joined the initiative. Other private participants include First Independent Power Limited, which operates four gas turbine plants in Rivers State, and Mabon Limited, a hydropower operator in Gombe State.

On the public side, Niger Delta Power Holding Company brings nine plants into the bailout, while Ibom Power Company, owned by the Akwa Ibom State Government, contributes a 190-megawatt gas turbine facility. Despite these commitments, the Association of Power Generation Companies (APGC) raised concerns over how the N3.3 trillion figure was calculated, citing gaps between government communications and prior reconciliations with GenCos.

The debt, which accumulates unpaid invoices, capacity payments, foreign exchange differentials, and supplementary operational charges, reflects nearly a decade of chronic underpayment across the electricity sector. Frequent plant start-ups and shutdowns, coupled with unstable gas supply, have imposed extraordinary maintenance costs on generators that are not covered by existing tariffs, intensifying the sector’s liquidity crisis.

Government officials emphasized that the bailout funds are conditional, requiring generators to settle debts with gas suppliers, invest in plant rehabilitation, and expand capacity. Analysts stress that a transparent reconciliation of outstanding claims is critical for the program’s success. With Nigeria generating only 4,000 to 5,000 megawatts for over 220 million citizens, resolving the power debt overhang is seen as a vital step to attracting investment and boosting electricity access nationwide.

source: Business day