By Joycelyn Ellakeche Adah

In a decisive move to avert a looming collapse of Nigeria’s power sector, the Federal Government has pledged immediate intervention to tackle the over N4 trillion debt owed to power generation companies (GenCos).

The commitment was made following a high-level meeting on Tuesday between the Minister of Power, Chief Adebayo Adelabu, and the leadership of the Generating Companies of Nigeria in Abuja.

The talks come amid rising concerns over the financial viability of the sector and its critical role in national development.

Adelabu assured GenCos of the government’s resolve to make immediate cash payments to defray part of the debt, with the remainder to be settled through alternative financial instruments, including promissory notes.

He further disclosed that a future meeting between President Bola Tinubu and the executives of the Generation Companies is being arranged to facilitate the expedited resolution of the matter.

“There is a need to pay a substantial amount of the debt in cash. At the minimum, let us pay a substantial amount, then issue promissory notes to cover the rest.”

He added that the full balance would be cleared within six months, reinforcing the government’s commitment to stabilizing the power sector.

Acknowledging the Federal Government’s part in the sector’s difficulties, Adelabu pledged reforms to address systemic inefficiencies.

He also underscored the need for the full liberalization of the power market and called on Nigerians to embrace cost-reflective tariffs.

“Citizens must pay the appropriate price for the energy consumed. The Federal Government will continue to provide targeted subsidies for the economically disadvantaged, but subsidies cannot be sustained indefinitely,” he said.

The Minister also outlined future reforms, including regulatory reviews aimed at reducing levies and enhancing market liquidity.

He urged GenCos to collaborate on public education campaigns to promote energy efficiency and help citizens understand the necessity of tariff adjustments.

“We must ensure that Nigerians are aware of the realities of the electricity market and the shared responsibility required to keep it functional,” Adelabu said.

The GenCos, led by retired Col. Sani Bello, the Chairman of Mainstream Energy Solutions and Chairman of the Association of Power Generating Companies (APGC), warned that the N4 trillion debt poses a grave threat to the sector.

Bello stressed that liquidity challenges have left companies unable to access funding or maintain essential infrastructure.

“Without urgent intervention, the entire power ecosystem could collapse,” he cautioned.

Reinforcing Bello’s position, Mr. Kola Adesina, the Chairman of Egbin Power and First Independent Power Limited, described the situation as a national emergency, saying “Everything hinges on power—industries, homes, hospitals. We cannot afford to let the sector fail.”

Dr. Joy Ogaji, the CEO of APGC, highlighted a range of structural challenges undermining GenCos’ operations—from chronic payment defaults and gas supply disruptions to currency instability.

She noted that the depreciation of the naira—from ₦157/$1 in 2013 to over ₦1,600/$1 in 2025—has severely impacted maintenance budgets and loan servicing.

“GenCos have continued operations under immense pressure, despite grid collapses, regulatory bottlenecks, and punitive tax regimes,” she said.