Nearly two months after promising a meeting with power generation companies (GenCos) over the ₦4.7 trillion debt owed them, the Federal Government has yet to initiate any formal discussions.
Last month, government officials had indicated plans to pay ₦2 trillion of the debt before the end of the next quarter. However, GenCos have confirmed that no communication has been received regarding payment or the proposed meeting with President Bola Tinubu.
Joy Ogaji, Chief Executive Officer of the Association of Power Generation Companies, disclosed that the GenCos are still awaiting contact from the government, despite assurances made after a meeting with the Minister of Power in May, where immediate action on the debt was promised.
During the May meeting, it was stated that the government would clear part of the debt in cash, while the balance would be settled using financial instruments such as promissory notes over six months. However, as of now, no payments have been made, and no date has been set for the promised meeting with the President.
GenCos have repeatedly highlighted the challenges the debt has created, including difficulties in paying for gas supply, maintaining plants, and managing loans amid the naira’s depreciation and rising operating costs.
Currently, the government owes GenCos ₦2 trillion for power supplied in 2024, while legacy debts stand at ₦1.9 trillion. Documents show that between January and December 2024, GenCos issued invoices worth ₦2.7 trillion, of which only ₦762 billion was paid, leaving an outstanding ₦1.94 trillion and reflecting a recovery rate of just 28 per cent.
The debt burden has placed the power sector under severe strain, with some GenCos warning of possible shutdowns due to an inability to pay gas suppliers. Operators have also raised concerns about how the government plans to offset the debt, given that the 2025 budget allocates only ₦900 billion for the power sector.
Stakeholders warn that without urgent intervention, the liquidity crisis could lead to further instability in the power sector, undermining electricity supply across the country and derailing efforts to improve power generation capacity.
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