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Presidency Moves to Resolve N2 Trillion GenCo Debt

Written by Agboola Oluwafemi on June 3, 2025

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In a renewed effort to stabilise Nigeria’s power sector, the Presidency has commenced internal approval processes aimed at resolving the longstanding N2 trillion debt owed to electricity generation companies (GenCos). This move is expected to reach a resolution before the end of the next quarter.

The disclosure was made during the second Nigerian Electricity Supply Industry (NESI) Stakeholders Meeting of 2025, convened by the Nigerian Electricity Regulatory Commission. The Office of the Special Adviser to the President on Energy confirmed that alternative debt instruments are under consideration, given prevailing fiscal constraints.

The Presidency acknowledged the urgency of addressing the legacy debt, which has placed significant financial strain on GenCos and negatively impacted electricity generation and supply across the country. Key fiscal authorities, including the Coordinating Minister of the Economy and the Debt Management Office, are reported to be aligned with the proposed financing strategy.

While a definitive timeline was not announced, it is anticipated that a formal update on the debt settlement will be provided within three months, during the next NESI Stakeholders Meeting.

The electricity generation companies have previously raised alarms over mounting debts, which now exceed N4 trillion. According to the Senate Committee on Power, the Federal Government currently owes GenCos approximately N200 billion monthly due to tariff shortfalls. Since the beginning of the year, no payments have been made, raising the total outstanding to about N800 billion.

The stakeholder forum gathered regulators, operators, and industry leaders to confront persistent challenges within the power sector and to strategise on ongoing reforms. Critical topics included the nation’s metering deficit, implementation of the Presidential Metering Initiative, the proposed Meter Asset Fund, and the operationalisation of the Nigerian Independent System Operator (NISO).

Other key discussions involved the transition to a multi-tier electricity market and the expanding role of newly established State Electricity Regulatory Commissions.

Amid ongoing decentralisation driven by the Electricity Act 2023, concerns were raised about potential market fragmentation. The Nigerian Bulk Electricity Trading Plc cautioned that harmonisation of policies is essential, urging NISO to assume a leading role in ensuring coherence across the sector.

NISO’s leadership provided a detailed outline of its vision and operational mandate, underscoring the agency’s responsibility in promoting transparency, enhancing system coordination, and ensuring operational stability in Nigeria’s evolving electricity landscape.

Stakeholders at the meeting welcomed the Presidency’s debt resolution initiative, expressing cautious optimism that the proposed reforms could provide the foundation for a more resilient and sustainable electricity supply industry.