Nigeria’s Presidency begins internal processes to clear a N2tn legacy debt owed to GenCos by end of current quarter, aiming to stabilise the power sector amidst fiscal constraints
[dropcap]T[/dropcap]he Presidency has commenced internal approval processes aimed at resolving the outstanding N2tn legacy debt owed to electricity generation companies (GenCos) within the current quarter.
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This move is a critical part of efforts to stabilise Nigeria’s embattled power sector.
Eriye Onagoruwa, a representative of the Special Adviser to the President on Energy, disclosed this on Monday at the second Nigerian Electricity Supply Industry (NESI) Stakeholders Meeting of 2025, hosted by the Nigerian Electricity Regulatory Commission.
Onagoruwa conveyed the Presidency’s recognition of the urgency in addressing this significant debt overhang, which has severely strained GenCos and hampered electricity supply across the nation.
She revealed that alternative debt instruments are being explored due to the Federal Government’s current fiscal constraints.
“We are empathetic to what GenCos are facing,” Onagoruwa stated. “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.”
While a definitive timeline was not provided, Onagoruwa expressed optimism that a clear update would be available before the next quarterly NESI Stakeholders Meeting, suggesting potential progress within the next three months. “I hope by the next NESI meeting, I will be able to share a clear update,” she said.
GenCos had issued a warning to the Federal Government over the continuous accumulation of debts, which have now surpassed N4tn.
The Senate Committee on Power recently voiced concerns regarding the liquidity crisis plaguing the power sector, lamenting that tariff shortfalls mean the government owes approximately N200bn to electricity-generating companies each month.
The committee further disclosed that no payments have been made to power producers this year, escalating the debt by an additional N800bn.
The stakeholders meeting brought together regulators, operators, and other key players in the electricity value chain to tackle persistent bottlenecks and map out a course for ongoing sector reforms.
Key agenda items included the widening metering gap, the Presidential Metering Initiative, the proposed Meter Asset Fund, and the establishment of the Nigerian Independent System Operator.
Discussions also covered the transition to a multi-tier electricity market and the role of newly created State Electricity Regulatory Commissions.
John Akinnawo, the acting Managing Director of the Nigerian Bulk Electricity Trading Plc, cautioned against the risk of market fragmentation amidst decentralisation moves triggered by the Electricity Act 2023. He urged NISO to take the lead in ensuring policy and operational harmonisation.
NISO’s Managing Director, Abdu Mohammed Bello, presented an in-depth briefing on the agency’s vision, mission, and core functions, highlighting its role in improving transparency, system coordination, and operational stability in the evolving electricity market.
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Stakeholders at the meeting welcomed the Presidency’s intervention on the GenCo debt and expressed optimism that the combined reforms would help reposition Nigeria’s electricity supply industry for long-term sustainability.
Oreoluwa is an accountant and a brand writer with a flair for journalism.
