The Nigerian Presidency has initiated internal approval processes aimed at settling the ₦2 trillion legacy debt owed to electricity generation companies (GenCos) by the end of the upcoming quarter, in a bid to stabilise the country’s struggling power sector.
A representative of the Special Adviser to the President on Energy, Eriye Onagoruwa, disclosed this development on Monday during the second Nigerian Electricity Supply Industry (NESI) Stakeholders Meeting of 2025, hosted by the Nigerian Electricity Regulatory Commission (NERC).
Onagoruwa acknowledged the financial strain the unpaid debt has placed on GenCos, stating that the Federal Government is exploring alternative debt instruments due to current fiscal limitations.
“We are empathetic to what GenCos are facing,” she 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.”
While no definitive timeline was given, she expressed optimism that a clearer update would be provided before the next quarterly NESI meeting, suggesting that some progress could be confirmed within three months.
The GenCos had earlier raised alarm over the rising debt burden, which they claim has now exceeded ₦4 trillion.
The Senate Committee on Power recently highlighted the deepening liquidity crisis within the sector, estimating that tariff shortfalls have led to monthly government debt accumulation of around ₦200 billion.
According to the committee, the government has not made payments to GenCos so far in 2025, raising this year’s outstanding debt to an estimated ₦800 billion.
The stakeholders’ meeting brought together regulators, operators, and major players across the electricity value chain to address longstanding sector challenges.
Key issues on the agenda included the widening metering gap, the Presidential Metering Initiative, the proposed Meter Asset Fund, and the establishment of the Nigerian Independent System Operator (NISO).
Discussions also centred on the transition to a multi-tier electricity market and the emerging role of newly constituted State Electricity Regulatory Commissions.
The acting Managing Director of the Nigerian Bulk Electricity Trading Plc, John Akinnawo, warned against potential market fragmentation arising from decentralization under the Electricity Act 2023. He called on NISO to spearhead efforts at policy and operational harmonization.
NISO’s Managing Director, Abdu Mohammed Bello, presented a comprehensive overview of the agency’s mandate, underscoring its role in ensuring system transparency, enhanced coordination, and operational stability in the evolving power market.
Stakeholders welcomed the Presidency’s debt intervention and expressed hope that ongoing reforms, coupled with prompt financial resolutions, would help restore confidence and drive sustainable progress in the power sector.
