President Bola Tinubu has appealed to electricity generation companies (GENCOs) for more time to conduct a transparent verification of the N4 trillion debt claims owed by the Federal Government. The President made this call on Friday during a high-level meeting with power sector stakeholders at the Presidential Villa, Abuja, where he also granted anticipatory approval for a N4tn bond programme to address the sector’s mounting liquidity crisis.
The meeting, attended by top officials including Minister of Power Adebayo Adelabu, Special Adviser on Energy Olu Verheijen, and business leaders Tony Elumelu and Kola Adesina, underscores the urgency of the financial gridlock threatening Nigeria’s electricity market.
The Nigerian Bulk Electricity Trading Company (NBET) has long struggled to meet its financial obligations to GENCO, often paying only a fraction of monthly invoices. This has forced power producers to rely on commercial bank loans at double-digit interest rates, further worsening the sector’s debt overhang.
Since Nigeria’s electricity privatisation in 2013, challenges such as unpaid subsidies, energy theft, gas supply constraints, and weak transmission infrastructure have crippled the market. Although the Electricity Act 2023, signed by Tinubu, introduced cost-reflective tariffs, metering initiatives, and improved collections, GENCO warn that fresh investment could stall without immediate government intervention.
Verheijen revealed that N4tn in debts has accumulated since 2015, with NBET validating N1.8tn of these claims so far. She clarified that the final figure may be revised downward after the ongoing verification exercise.
While acknowledging the legitimacy of the arrears, Tinubu stressed the need for a credible and verifiable audit before settling the debt.
“I accept the assets and liabilities of my predecessors, but that acceptance must be on credible grounds. Give us time to verify and validate these numbers,” he told GENCO representatives, urging them to show patience as government agencies engage auditors and lawyers to scrutinize the claims.
The President also appealed to commercial banks to avoid foreclosing on indebted GENCOs, describing electricity as “the most important discovery of humanity in the last 1,000 years.”
“To our friends in the banking sector, avoid foreclosures. Sharpen your pencils, but keep an eraser handy. Let’s persevere together,” Tinubu added.
Minister of Power Adebayo Adelabu highlighted recent sector improvements under Tinubu’s administration. According to him:
Installed generation capacity has grown from 13,000MW to 14,000MW.
The country achieved an all-time peak generation of 5,801MW and a record daily energy delivery of 120,370 MWh on March 4, 2025.
There has been no national grid collapse in 2025, attributed to the Presidential Power Initiative, which has added 700MW of transmission capacity.
Sector revenue grew by 70% in one year, from N1tn in 2023 to N1.7tn in 2024, reducing government subsidy obligations by N700bn.
The Presidential Metering Initiative and the World Bank-supported DISREP project have already delivered 300,000 smart meters, narrowing Nigeria’s metering gap.
Adelabu, however, warned that without clearing the debt, the sector risks a “nationwide shutdown of generation assets.”
Business moguls Tony Elumelu and Kola Adesina urged the President to act swiftly, warning that liquidity remains the “oxygen of the power business.” Elumelu said, “Power is critical to unlocking Nigeria’s full potential. Without urgent intervention, foreclosures will cascade across the sector.”
Adesina emphasized gas supply issues, proposing that 800 million cubic feet of gas from NLNG be unlocked to improve generation capacity, especially in underperforming plants like those in the Afam axis.
The Federal Government plans to proceed with the N4tn bond issuance only after completing a full audit of GENCO debt claims. The Debt Management Office (DMO) is expected to structure the programme, but final disbursement will depend on validated obligations.
Energy analysts argue that resolving this debt overhang could unlock private sector investment, stabilize Nigeria’s electricity supply, and spur industrial growth. However, delays in settlement could worsen liquidity constraints and deter investors.