Tinubu Set To Intervene as N4tn Power Sector Debt Threatens National Grid Stability
President Bola Tinubu is preparing to hold a critical meeting with executives of Nigeria’s power generation companies (Gencos) in a bid to tackle the growing N4 trillion debt crisis threatening the country’s electricity supply chain.
This intervention follows a high-level engagement on Tuesday between the Minister of Power, Adebayo Adelabu, and the chairmen of several Gencos in Abuja. The meeting, held amid escalating concerns about a possible collapse of the national grid due to liquidity shortfalls, prompted immediate government pledges to begin offsetting the mounting debt.
According to a statement released on Sunday by the minister’s Special Adviser on Strategic Communications and Media Relations, Bolaji Tunji, the Federal Government plans to make an upfront cash payment to the Gencos, with the balance to be settled using financial instruments such as promissory notes over the next six months.
“There is a need to pay a substantial amount of the debt in cash. At the minimum, let us pay a substantial amount, then ask for debt instruments in promissory notes to pay the rest,” Adelabu emphasized.
Gencos had earlier warned the government about the unsustainable N4tn liability, comprising N2tn for power generated in 2024 and another N1.9tn in legacy debts. The companies have stressed that without urgent action, the entire power sector is at risk of systemic failure.
Col. Sani Bello (retd), Chairman of Mainstream Energy Solutions and head of the Association of Power Generating Companies, said the debt burden has paralyzed operations, restricted access to critical funding, and stalled infrastructure upgrades. “Without urgent intervention, the entire power ecosystem could collapse,” he warned.
Kola Adesina, Chairman of Egbin Power and First Independent Power Limited, echoed this alarm: “This is a national emergency. Everything hinges on power—industries, homes, hospitals. We cannot afford to let the sector fail.”
Adelabu acknowledged longstanding structural and policy weaknesses within the power sector. He stressed that the government’s focus goes beyond debt settlement, pointing to broader reforms aimed at ensuring long-term stability.
He also called for a fully liberalized electricity market and urged Nigerians to accept cost-reflective tariffs, arguing that general subsidies are no longer viable. “We recognise the urgency of this matter. The government is committed to resolving this debt to stabilise the sector and prevent further crisis,” he said.
Dr. Joy Ogaji, CEO of the Association of Power Generation Companies, outlined further challenges, including erratic gas supply, foreign exchange instability, and payment defaults. She noted that the naira’s dramatic fall—from N157/\$1 in 2013 to N1,600/\$1—has compounded financial pressures on the Gencos, particularly for loan repayments and maintenance.
“Gencos have borne unsustainable risks—from grid failures to unproductive taxes—while remaining patriotic,” Ogaji said.
The Minister also revealed that the government is working on regulatory reforms to stabilize the electricity market and reduce levies that strain Gencos. He urged power companies to collaborate with the government in educating the public on efficient energy use and tariff realities.
