FG GenCos power debt dispute deepens as government and generation firms disagree over liabilities and reconciliation in Nigeria’s electricity sector

Adebayo Adelabu, Nigeria’s Minister of Power, on Friday said the Federal Government’s liabilities to power generation companies could be significantly lower than widely reported, as reconciliation efforts continue within the electricity market, triggering a sharp response from industry operators.

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Speaking at a press conference in Abuja, Mr Adelabu stated that the disputed obligations, often cited at about N6.3tn, may settle closer to N4tn once ongoing reviews are concluded.

He also issued an apology to Nigerians over persistent power outages, describing the situation as a pressing national concern.

“You asked how much we owe suppliers. I can tell you that the amount we owe GenCos is estimated and is still being reconciled,” he said, explaining that earlier figures of N4tn had already been adjusted to about N2.8tn after auditing interest and foreign exchange components.

Mr Adelabu added that a substantial portion of the liabilities, estimated at no less than 60 per cent, is owed to gas suppliers, underscoring the complexity of the sector’s financial obligations.

However, the government’s position has been firmly contested by operators, intensifying the FG GenCos power debt dispute and exposing deep divisions over the credibility of current figures.

Responding to the minister’s remarks, Joy Ogaji, Executive Secretary of the Association of Power Generation Companies, questioned how the government derived its estimates and called for a transparent, multi-party reconciliation process.

“We are talking about a bilateral agreement, which means reconciliation of figures should be done by all parties,” Ms Ogaji said, noting that the last joint reconciliation meeting took place in March 2025.

She maintained that no subsequent reconciliation had been conducted with generating companies, raising concerns over the validity of the government’s revised figures.

“I spoke with the GenCos, and they confirmed that after the March reconciliation, no other reconciliation has been done. So how did the government get its figures from?” she asked.

Ms Ogaji also criticised reliance on Nigerian Bulk Electricity Trading Plc as a primary data source, arguing that accurate figures can only emerge through comprehensive verification involving all stakeholders.

She outlined the breadth of GenCos’ claims, which include unpaid invoices for electricity generated since 2015, capacity payments, deemed capacity, foreign exchange differentials, and supplementary costs linked to frequent plant start-ups and shutdowns.

Additional liabilities cover interest on outstanding payments, Value Added Tax on gas supplies, and losses tied to low plant utilisation due to gas and transmission constraints.

The dispute comes amid broader government efforts to stabilise Nigeria’s power sector and address longstanding liquidity challenges.

It also follows approval by President Bola Ahmed Tinubu of N2.8tn as the verified portion of legacy debts owed to generation companies after an audit of subsidy obligations.

A senior government official familiar with the process said the approved amount reflects validated liabilities, with further reconciliation ongoing to resolve outstanding claims.

The FG GenCos power debt dispute highlights a critical moment for Nigeria’s electricity market, where clarity over financial obligations is seen as essential to restoring investor confidence and ensuring sustainable power supply.

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Despite ongoing reforms, the sector continues to grapple with legacy debts, tariff shortfalls, and structural inefficiencies, factors that have constrained investment and hindered stable electricity delivery nationwide.