At the second Nigerian Electricity Supply Industry Stakeholders Meeting of 2025, convened by the Nigerian Electricity Regulatory Commission (NERC) on Monday, the Presidency reaffirmed its commitment to clear the N2 trillion legacy debt owed to Nigeria’s generation companies (GenCos) before the end of the third quarter of 2025.
A representative of the Special Adviser to the President on Energy, Eriye Onagoruwa, delivered the assurance, citing the administration’s awareness of the critical role GenCos play in sustaining electricity supply nationwide.
Onagoruwa opened her remarks by acknowledging the historical debt overhang’s corrosive effect on GenCos’ operations.
“We are empathetic to what GenCos are facing,” she stated, noting that unpaid power-generation invoices have not only strained the balance sheets of generation outfits but have also contributed to erratic electricity supply and threatened sector collapse.
“If left unaddressed,” she warned, “the debt burden could force some GenCos to declare force majeure or shut down entirely.”
In explaining how the Tinubu administration intends to fulfill this pledge—despite severe fiscal constraints—Onagoruwa said the Presidency is exploring alternative debt instruments rather than relying on immediate budgetary outlays.
“We are exploring alternative debt instruments,” she confirmed, “and I can assure you 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 did not specify which instruments (e.g., bonds, concessional financing, or debt-for-equity swaps) are under consideration, her statement underscored a concerted, cross-ministerial approach to relieve GenCos of their arrears.
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The N2 trillion figure refers to debts owed by the Nigerian Bulk Electricity Trading Plc. (NBET) to power-generation firms for electricity supplied but not fully paid for under past tariff regimes.
Onagoruwa’s commitment comes against the backdrop of a larger N4 trillion gas debt that has lingered unaddressed, further hampering GenCos’ ability to procure necessary fuel and maintain consistent generation.
In April, several GenCos had threatened to shut down their operations in protest of the unpaid gas debt owed by market operators. Reports at the time indicated that the government pledges to clear at least 50 percent of the N4 trillion before year-end—a commitment also made by the Minister of Power, Adebayo Adelabu—had yet to materialize in concrete payments.
In recent years, Nigeria’s power sector—privatized over a decade ago—has been crippled by a combination of infrastructural decay, fuel-supply bottlenecks, tariff shortfalls, and governance challenges.
Frequent grid collapses and widespread vandalism compound these issues, leaving many Nigerians reliant on generators for basic power needs.
The legacy debts, first incurred under previous cost-reflective tariff regimes and exacerbated by unremedied fuel-supply debts, have long been identified as a key barrier to sectoral stability.
As the third quarter approaches, stakeholders across the generation and distribution spectrum will be watching closely for tangible progress.
Should the Presidency follow through on its promise, GenCos may finally receive the lifeline needed to restore plant maintenance schedules, resume consistent generation, and attract fresh investment—potentially ushering in a new chapter for Nigeria’s beleaguered power industry.