Abuja: President Bola Tinubu has committed to the payment of a N4 trillion debt claimed by Nigeria's power generation companies (GenCos), contingent upon a thorough verification process. The assurance was delivered during a meeting held at the State House, Abuja, with the Association of Power Generation Companies.
According to News Agency of Nigeria, the meeting details were disclosed by Presidential Spokesperson, Mr. Bayo Onanuga. The delegation, led by retired Col. Sani Bello, included key industry stakeholders. President Tinubu emphasized his dedication to addressing the liquidity challenges faced by Nigeria's electricity sector. He stated, "I accept the liabilities of my predecessors, but only on credible and verifiable grounds. I must confirm the figures are authentic. This inheritance must not be cosmetic, but a tool for industrial and economic advancement."
The President urged power firms and financial institutions to be patient during the verification process, highlighting the importance of a market-driven electricity sector and acknowledging unresolved legacy issues. "We are here now. Please inform your colleagues. Allow us time for proper validation of the numbers," Tinubu added. He also appealed to banks for cooperation in resolving financial constraints, urging them to "avoid foreclosures" and be "prudent, but flexible."
Special Adviser on Energy, Ms. Olu Verheijen, noted the approval of a N4 trillion bond to alleviate power sector liquidity issues, attributing the crisis to unpaid tariff shortfalls and market gaps. The Federal Government owes a verified N4 trillion debt to GenCos dating back to 2015. "We've met with 27 GenCos to review their PPAs and gas agreements, validating the legitimacy of claims," she said, confirming that the Nigerian Bulk Electricity Trading (NBET) has validated N1.8 trillion of these claims so far.
Minister of Power, Adebayo Adelabu, praised Tinubu's leadership and recent sector reforms, citing the Electricity Act 2023 as a breakthrough for decentralizing and liberalizing the market. He mentioned that over $2 billion in private capital was attracted for grid expansion projects, resulting in a 70% increase in revenue and a reduction of government subsidies by more than N700 billion. However, he warned that liquidity issues threaten to undo recent gains, urging the President to approve phased payments to GenCos without delay.
Business leaders Tony Elumelu and Kola Adesina also called for swift government intervention, highlighting the risk of foreclosure due to unpaid debts. Elumelu commended Tinubu for restoring investor confidence and oil production, while Adesina stressed the need for liquidity and reliable gas supply to support power generation. The meeting was attended by top government officials, regulators, and power sector stakeholders, including the Chief of Staff, Minister of Finance Wale Edun, and Minister of Information Mohammed Idris.