Presidency Initiates Measures To Resolve N2tn Power Sector Debt

The presidency has initiated internal approval processes aimed at resolving the N2 trillion legacy debt owed to electricity generation companies (GenCos), with a target to finalize the plan before the end of the next quarter. This move forms part of broader efforts to stabilize Nigeria’s struggling power sector.

A representative of the Special Adviser to the President on Energy, Eriye Onagoruwa, revealed this on Monday during the second Nigerian Electricity Supply Industry (NESI) Stakeholders Meeting of 2025, hosted by the Nigerian Electricity Regulatory Commission (NERC).

Onagoruwa emphasized the urgency of addressing the longstanding debt burden, which has placed significant strain on GenCos and undermined electricity supply across the country. She noted 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 she stopped short of providing a firm deadline, Onagoruwa expressed confidence that progress would be made in the coming months.

“I hope by the next NESI meeting, I will be able to share a clear update,” she added, suggesting an update could come within three months.

The PUNCH previously reported that GenCos had raised concerns over the rising debt burden, which they estimate now exceeds N4 trillion. The Senate Committee on Power also recently flagged the liquidity crisis in the sector, pointing out that tariff shortfalls mean the government owes GenCos around N200 billion monthly. So far this year, no payments have been made to power producers, pushing the 2025 debt alone to an estimated N800 billion.

Monday’s meeting gathered regulators, operators, and stakeholders across the electricity value chain to address systemic challenges and discuss reforms. Key topics included the widening metering gap, the Presidential Metering Initiative, the proposed Meter Asset Fund, and the operationalisation of the Nigerian Independent System Operator (NISO). The transition to a multi-tier electricity market and the emergence of State Electricity Regulatory Commissions were also on the agenda.

John Akinnawo, acting Managing Director of the Nigerian Bulk Electricity Trading Plc, warned against potential market fragmentation amid the decentralisation efforts triggered by the Electricity Act 2023. He called on NISO to play a central role in ensuring policy coherence and operational integration.

NISO’s Managing Director, Abdu Mohammed Bello, outlined the agency’s mission to promote transparency, coordination, and stability in Nigeria’s evolving electricity market.

Stakeholders at the meeting welcomed the presidency’s planned intervention on GenCo debt, expressing optimism that combined financial and structural reforms could reposition the country’s power industry for long-term viability.

With sector-wide reforms already in motion and expectations of a debt resolution update in the next quarter, attention is now focused on how swiftly and effectively the presidency will deliver on its commitment.