Victor Ezeja
Nigeria’s Minister of Power, Adebayo Adelabu, has disclosed that the Federal government plans to pay off N2 trillion of the N4 trillion debt owed to power generation companies (GenCos) in the country by the end of this year.
Join our WhatsApp ChannelThe sum that needs to be paid in cash and promissory notes, he claimed, is an effort to pacify the GenCos so they won’t shut down their plants.
This assurance comes as GenCos have threatened to shut down their power plants over unpaid debts.
Prime Business Africa reports that GenCos had warned the Federal Government about the debt, which now stands at over N4 trillion.
In a statement released on Wednesday by the Association of Power Generation Companies, the Gencos expressed deep frustration over the debt owed by the government due to “inadequate payment for electricity generated and consumed on the national grid.”
They lamented that the escalating liquidity crisis in the power sector is threatening to force them to cease operations.
While speaking at the sixth edition of the 2025 Ministerial Press Briefing Series on Thursday in Abuja, the minister of power said talks with Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, were already in progress and that he had promised to pay off the loan using assured instruments like promissory notes or budgetary allocation.
He went on to say that these promissory notes will be sufficiently robust to be presented at banks in order to cover urgent financial needs.
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The minister, who also addressed concerns about recent tariff adjustments, unpaid subsidies, and increasing energy costs, clarified that “these debts are unpaid subsidies of the Federal Government, which are due to the power-generating companies. Almost half of it was inherited, while about half of it came from 2024 operations, which is N4 trillion.”
“There are plans underway to make these payments. While I will not say it will be paid 100 per cent, we will be paying it gradually. And the mode of payment is in two ways.
“We have sub-budgetary provisions which will facilitate cash payment while we are discussing with generating companies to give them guaranteed debt instruments like a promissory note, which we will give to them to pay them or defray some of these debts.
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“These promissory notes will be liquid enough for them to be taken to the banks for discounting if they need immediate cash injections. So, it is the combination of cash payment and promissory notes. And I can tell you that between now and the end of the year, we are going to pay close to N2tn out of this N4 trillion,” Adelabu further stated.
On why the electricity subsidy debt reached that amount, the minister said about 85 per cent of customers are still paying N60, but the average energy cost per kilowatt of power today is about N170 per kilowatt.
According to him, Nigeria has only recorded a 35 per cent reduction in electricity subsidies after a tariff increase was implemented last year, especially for Band A customers.
Victor Ezeja is a passionate journalist with seven years of experience writing on economy, politics and energy. He holds a Master's degree in Mass Communication.
