President Bola Tinubu is set to convene a critical meeting with Nigeria’s power generation companies (GenCos) to address a staggering ?4 trillion debt threatening the stability of the nation’s electricity sector. This initiative follows warnings from GenCos about potential shutdowns due to the financial strain.
The ?4 trillion debt comprises ?2 trillion for electricity supplied in 2024 and ?1.9 trillion in legacy debts. GenCos have expressed concerns over their inability to maintain operations, citing challenges like erratic gas supply, foreign exchange volatility, and chronic payment defaults. The depreciation of the naira from ?157/$1 in 2013 to ?1,600/$1 has further exacerbated maintenance and loan repayment issues.
Minister of Power, Adebayo Adelabu, acknowledged the government’s role in the sector’s struggles and pledged immediate action. He assured that a significant portion of the debt would be paid promptly, with the balance settled through financial instruments like promissory notes within six months. Adelabu also emphasized the need for full liberalization of the power sector and urged Nigerians to embrace cost-reflective tariffs, assuring that targeted subsidies would continue for the most vulnerable citizens.
Col. Sani Bello (Rtd), Chairman of Mainstream Energy Solutions and the Association of Power Generating Companies (APGC), warned of an imminent collapse of the power ecosystem if liquidity challenges persist. Kola Adesina, Chairman of Egbin Power, described the situation as a national emergency, highlighting the critical role of power in industries, homes, and hospitals. Joy Ogaji, CEO of APGC, detailed systemic challenges undermining GenCos, including grid failures and unproductive taxes, while stressing their continued commitment to national service.
The upcoming meeting between President Tinubu and GenCos is seen as a pivotal step toward resolving the debt crisis and stabilizing Nigeria’s power sector. The government’s commitment to immediate payments and structural reforms offers a glimmer of hope for the sustainability of electricity supply in the country.
