Federal Government Begins ₦2 Trillion Payment to Settle Power Sector Debts

 

The Presidency has announced the commencement of processes to pay ₦2 trillion out of the ₦4 trillion legacy debts owed for electricity generated and supplied to the national grid.  

This disclosure was made by a representative of the Special Adviser to the President on Energy, Olu Verheijen, during a Nigerian Electricity Supply Industry (NESI) stakeholders meeting organized by the Nigerian Electricity Regulatory Commission (NERC).  

According to Verheijen, settling the debts before the end of the next quarter is part of efforts to stabilize Nigeria’s power sector. She noted that alternative debt instruments are being explored due to the Federal Government’s fiscal constraints.  

Both the Coordinating Minister of the Economy, Wale Edun, and the Debt Management Office (DMO) have reportedly expressed support for the initiative, with internal approvals currently in progress.  

“We’re empathetic to what GenCos are facing,” Verheijen said through her representative, Eriye Onagoruwa. While specific timelines remain unclear, she assured stakeholders that significant progress had been made, adding, “I hope by the next NESI meeting, I’ll be able to share a clear update.”  

The move follows warnings from Generation Companies (GenCos) over the mounting debt, now exceeding ₦4 trillion, which includes ₦2 trillion for 2024 and ₦1.9 trillion in legacy debts. GenCos have stated that the debt crisis threatens the continued operation of their power plants.  

In February, the Minister of Power, Adebayo Adelabu, acknowledged that the Federal Government owed GenCos and Distribution Companies (DisCos) over ₦4 trillion, a burden crippling the sector’s efficiency. However, in April, Adelabu pledged to resolve all outstanding debt issues.  

This latest step signals the government’s commitment to addressing the financial challenges in Nigeria’s electricity sector.