Presidency moves to settle N2tn power sector debt

The Presidency has initiated internal approval processes aimed at settling the N2 trillion legacy debt owed to electricity generation companies (GenCos), as part of ongoing efforts to stabilise Nigeria’s power sector.

This was disclosed on Monday by a representative of the Special Adviser to the President on Energy, Eriye Onagoruwa, during the second Nigerian Electricity Supply Industry (NESI) Stakeholders Meeting for 2025, hosted by the Nigerian Electricity Regulatory Commission (NERC).

Onagoruwa acknowledged the urgency of addressing the mounting debt, which she said has severely impacted GenCos and contributed to Nigeria’s unreliable electricity supply. She revealed that the Federal Government, constrained by tight fiscal space, is exploring alternative instruments to settle the obligations.

“We are empathetic to what GenCos are facing,” Onagoruwa said. “We are exploring alternative debt instruments, and I can confirm that both the Coordinating Minister of the Economy and the Debt Management Office are aligned with this effort. Internal approvals are currently underway.”

Although she refrained from providing a fixed timeline, Onagoruwa expressed optimism that a concrete update would be available before the next quarterly NESI meeting, hinting at potential progress within three months.

“I hope by the next NESI meeting, I will be able to share a clear update,” she said.

The GenCos have consistently raised alarms over the growing debt burden, which industry sources say has now ballooned to over N4 trillion. The companies argue that the unresolved arrears are crippling their operations and threatening the sustainability of power supply nationwide.

Recently, the Senate Committee on Power also raised concerns about the liquidity crisis facing the sector, noting that government tariff shortfalls result in the accumulation of roughly N200 billion in unpaid obligations to GenCos each month.

Stakeholders have urged the government to urgently implement financial reforms to clear the debt and restructure the industry to attract new investments and improve service delivery.