FG promises to offset part of debt owed GenCos next quarter

The federal government plans has given the promise to pay offset N2 trillion out of the over N4 trillion debt owed power generation companies (GenCos) before the end of the next quarter.

According to the Special Adviser to the President on Energy, Olu Verheijen, speaking through her representative Eriye Onagoruwa at a Nigerian Electricity Supply Industry (NESI) stakeholders’ meeting hosted by the Nigerian Electricity Regulatory Commission (NERC), said the move is a crucial step to stabilise Nigeria’s struggling power sector.

“We are empathetic to what GenCos are facing. While timelines cannot yet be confirmed, significant groundwork has been laid,” she said.

The N4 trillion debt, which includes N2 trillion accrued in 2024 and N1.9 trillion in legacy debts, has put a strain on power generation companies, threatening the operation of their plants.

In February, the Minister of Power, Adebayo Adelabu, acknowledged the scale of the problem, describing it as “crippling” to the sector’s performance.

Verheijen confirmed that both the Coordinating Minister of the Economy, Wale Edun, and the Debt Management Office (DMO), have thrown their support behind the plan to settle a portion of the debts.

“Alternative debt instruments are being explored, given the Federal Government’s fiscal constraints. Internal approvals are currently underway,” she explained.

The move to pay the N2 trillion follows a recent warning from GenCos to the Federal Government, urging immediate action to prevent a total collapse of their operations.

Verheijen assured stakeholders that updates on the debt payments would be provided at the next NESI meeting.

Power Minister Adelabu had earlier pledged to resolve the debt crisis. In April, he promised that “all issues surrounding the debts will be addressed” to revive the sector’s financial health.