By Hosea Parah, Abuja

In a decisive move to salvage Nigeria’s struggling power sector, the Federal Government has pledged urgent action to address the N4 trillion debt owed to electricity generating companies (GenCos). This commitment was made following a high-level meeting recently in Abuja between the Minister of Power, Adebayo Adelabu, and the leadership of the Generating Companies of Nigeria.

In a statement issued recently by Bolaji Tunji Special Adviser, Strategic Communications and Media Relations to the Honourable Minister of Power. The minister assured the GenCos of the government’s intention to make a substantial cash payment toward the outstanding debt, while the remaining balance would be settled through financial instruments such as promissory notes. A meeting between President Bola Ahmed Tinubu and the GenCos’ leadership is expected soon to formalize the arrangement.

“There is need to pay a substantial amount of the debt in cash. At the minimum, let us pay a substantial amount, then ask for debt instrument in promissory notes to pay the rest,” Adelabu stated. He added that the balance would be cleared within six months, emphasizing the government’s commitment to stabilizing the power sector.

Chairman of Mainstream Energy Solutions and leader of the GenCos delegation, Col. Sani Bello (Rtd), warned that the sector faces an existential crisis. “Without urgent intervention, the entire power ecosystem could collapse,” he said, citing the debt burden and liquidity challenges that have paralyzed operations and blocked access to credit.

Echoing his concerns, Kola Adesina, Chairman of Egbin Power and First Independent Power Limited, described the situation as a “national emergency,” stressing that power is the backbone of the country’s economic and social infrastructure.

Minister Adelabu acknowledged the government’s role in the sector’s current woes and vowed to pursue reforms that would remove operational barriers. He advocated for full liberalization of the power market and urged Nigerians to accept cost-reflective tariffs, while reaffirming the government’s commitment to targeted subsidies for the most vulnerable.

“Citizens must pay the appropriate price for the energy consumed. The Federal Government will continue to provide targeted subsidy for economically-disadvantaged Nigerians. We have to understand that our economy cannot sustain subsidies indefinitely,” Adelabu said.

Dr. Joy Ogaji, CEO of the Association of Power Generating Companies (APGC), highlighted longstanding challenges in the sector, including payment defaults, inconsistent gas supply, and the impact of foreign exchange volatility. She lamented that the naira’s steep devaluation—from ₦157/$1 in 2013 to ₦1,600/$1 in 2025—has crippled GenCos’ ability to maintain infrastructure and repay loans.

The minister also revealed plans to conduct regulatory reviews, cut operational levies, and foster market stability. He called on GenCos to support public awareness campaigns on energy efficiency and the importance of realistic tariffs.

The government’s renewed commitment marks a critical step toward preventing further deterioration of Nigeria’s power infrastructure and restoring investor confidence in the sector.