The Federal Government has announced plans to settle over N4 trillion owed to power generation companies for electricity supplied to the national grid.
Mr. Bola Tunji, Special Adviser, Strategic Communications and Media Relations, to the Minister of Power, disclosed this in an interview with the News Agency of Nigeria (NAN) in Abuja.
Reacting to a recent appeal by Generation Companies (GenCos) for the settlement of over N4 trillion in outstanding debts, Tunji stated that the Minister is deeply concerned about the issue. He noted that discussions are already ongoing with the Ministry of Finance expected to take over payment responsibilities to ease the strain on the sector.
According to him, “We expect the Ministry of Finance to take action on this soon. ” We are not unaware of this debt arising from the Federal Government’s commitment to a subsidy. Part of the debts are legacy debts, which were on the ground before the Minister of Power assumed office. The minister has repeatedly harped on this, knowing the implication of such debts to the operations of the various power sector stakeholders, especially the GenCos.”
Earlier in a statement, the Association of Power Generation Companies (APGC) revealed that GenCos are currently owed N2 trillion for power supplied in 2024 and N1.9 trillion in legacy debt. The GenCos also noted that against the backdrop of the many challenges facing the power sector in Nigeria, the persistent cash liquidity is one of the most pressing issues facing the sector and this has reduced their ability to continue to perform their obligations.
According to retired Col. Sani Bello, Chairman of the APGC Board of Trustees, the situation poses a serious threat to the stability of the entire electricity value chain. He stated that” Besides being owed huge debts, the GenCos were also operating under very harsh monetary and fiscal conditions.” It is no news that the GenCos have continued to bear the brunt of the liquidity crisis in the Nigerian Electricity Supply Industry (NESI).”
Stakeholders in the power sector have consistently urged the Federal Government to introduce financial stabilization measures warning that failure to act could lead to a deeper collapse in electricity generation and distribution in the country.
