Adelabu says FG may borrow to settle N4trn GenCos’ debt

By Abubakar Yunusa

Adebayo Adelabu, minister of power, said the federal government may borrow to settle part of the N4 trillion debt owed to power generation companies (GenCos).

Adelabu spoke during a high-level meeting with the leadership of the Association of Power Generation Companies (APGC), according to a statement on Sunday by Bolaji Tunji, his special adviser, strategic communications and media relations.

The meeting comes amid growing concern over the liquidity crisis in the power sector, which has left GenCos struggling to maintain operations.

Speaking at the meeting, Adelabu said the federal government would prioritise the immediate payment of a “substantial” portion of the debt in cash, while the remaining liabilities would be addressed using financial instruments like promissory notes.

“We need to pay a substantial amount of the debt in cash. At the minimum, let us pay a substantial amount, then ask for a debt instrument in promissory notes to pay the rest,” the minister said.

Adelabu said the resolution strategy will be tabled before President Bola Tinubu in a proposed meeting with GenCos’ leadership, adding that the outstanding balance could be cleared within six months.

“We recognise the urgency of this matter. The federal government is committed to resolving this debt to stabilise the sector and prevent further crisis,” he said.

On his part, Sani Bello, chairman of Mainstream Energy Solutions and head of APGC, said the N4 trillion owed has crippled the ability of GenCos to access credit or maintain infrastructure.

“Without urgent intervention, the entire power ecosystem could collapse,” Bello warned.

Kola Adesina, chairman of Egbin Power and First Independent Power Limited, described the situation as a “national emergency”.

“Everything hinges on power — industries, homes, hospitals. We cannot afford to let the sector fail,” he said.

Also speaking, Joy Ogaji, chief executive officer (CEO) of APGC, identified payment defaults, erratic gas supply, and exchange rate instability as major threats to GenCos’ sustainability.

Ogaji said the devaluation of the naira — from N157/$1 in 2013 to over N1,600/$1 in 2024 — has eroded operational budgets and loan repayments.

“GenCos have borne unsustainable risks from grid failures to unproductive taxes while remaining patriotic,” Ogaji said.

Adelabu acknowledged the government’s role in the sector’s struggles, pledging to implement reforms to ease operational bottlenecks.

He stressed the need for full liberalisation of the power sector and urged Nigerians to embrace cost-reflective tariffs.

“Citizens must pay the appropriate price for the energy consumed. The federal government will continue to provide targeted subsidy for economically- disadvantaged Nigerians,” he said

“We must understand that our economy cannot sustain subsidy indefinitely.”

To reposition the sector, Adelabu said the ministry would initiate regulatory reviews to reduce levies, improve transparency and stabilise the market.

He also urged GenCos to partner with the government on public awareness campaigns to promote efficient energy usage and compliance with new tariff regimes.