The Presidency has taken a significant step towards resolving the long-standing issue of legacy debt owed to electricity generation companies (GenCos) in Nigeria. According to Eriye Onagoruwa, a representative of the Special Adviser to the President on Energy, the Presidency has initiated internal approval processes to settle the N2 trillion debt before the end of the next quarter.
This development aims to stabilize Nigeria’s power sector, which has been severely strained due to the debt overhang. The debt issue has impeded electricity supply nationwide, causing widespread disruptions and affecting the overall economy.
Urgency Recognized
Onagoruwa emphasized that the Presidency recognizes the urgency of addressing the debt issue. Due to the Federal Government’s current fiscal constraints, alternative debt instruments are being explored to find a viable solution.
The disclosure was made at the second Nigerian Electricity Supply Industry Stakeholders Meeting of 2025, hosted by the Nigerian Electricity Regulatory Commission (NERC). The meeting brought together key stakeholders in the electricity value chain to discuss pressing issues and chart a course for ongoing sector reforms.
Progress Expected
Onagoruwa expressed hope that a clear update on the debt settlement would be available before the next quarterly NESI Stakeholders Meeting. This suggests that progress could be announced within the next three months, providing much-needed relief to the power sector.
Background
The debt crisis in the power sector has been ongoing, with GenCos previously warning the Federal Government about accumulating debts totaling over N4 trillion. The Senate Committee on Power had also raised concerns over the liquidity crisis, stating that the government owes about N200 billion to electricity-generating companies every month.
Stakeholder Reaction
Stakeholders at the meeting welcomed the Presidency’s intervention on the GenCo debt. They expressed optimism that the combined reforms would help reposition Nigeria’s electricity supply industry for long-term sustainability.
The Presidency’s efforts to address the debt issue are expected to have a positive impact on the power sector, enabling it to provide reliable and consistent electricity supply to the nation. With the internal approval processes underway, stakeholders are eagerly awaiting further developments and progress on the debt settlement.
