Nigerians to Endure Blackouts as FG, GenCos Continue to Disagree Over Electricity Debt Figure
- The FG has revised debts owed to GenCos after a reconciliation, but the figure is still lower than the widely cited N6.3 trillion
- GenCos insist no recent joint reconciliation has taken place and demand transparency on how the figures were calculated
- The disagreement highlights ongoing financial challenges in the power sector, including legacy debts and the need for clearer accounting
Legit.ng journalist Victor Enengedi has over a decade's experience covering energy, MSMEs, technology, banking and the economy.
The Federal Government and electricity generation companies in Nigeria are at odds over the true value of outstanding debts in the power sector, with each side presenting conflicting figures.
Minister of Power, Adebayo Adelabu, explained that the amount owed to generation companies is still under review and may be much lower than commonly reported.
Source: UGC
According to him, ongoing reconciliation efforts suggest the total liability could be closer to N4 trillion, rather than the widely cited N6.3 trillion.
Speaking during a press briefing in Abuja, Adelabu also addressed the issue of persistent power outages, offering an apology to Nigerians.
He noted that earlier estimates of about N4 trillion as of the end of 2024 were later adjusted to roughly N2.8 trillion after audit reviews, which accounted for interest charges and foreign exchange components.
The minister said:
“When we said N4tn as at the end of 2024, it was audited and agreed at about N2.8tn because of the interest elements and the foreign exchange components embedded in it."
He added that while some generation companies have accepted the revised figures, discussions are still ongoing with others. Adelabu maintained that once the reconciliation process is complete, the final debt figure for GenCos will likely settle around N4 trillion.
The minister further clarified that a significant portion of the debt—at least 60 percent—is tied to payments owed to gas suppliers, whose resources are essential for electricity generation in Nigeria.
GenCos Demand Transparency in Reconciliation Process
Despite the government’s position, power generation companies have pushed back, arguing that any reconciliation must be transparent and involve all relevant stakeholders.
Joy Ogaji, Executive Secretary of the Association of Power Generation Companies, questioned how the government arrived at its updated figures.
She emphasised that reconciliation should be a joint exercise, noting that the last meeting involving all parties took place in March 2025.
Ogaji revealed that discussions with GenCos indicate no further reconciliation has occurred since that meeting, raising concerns about the basis of the government’s claims.
She called on authorities to disclose the methodology and components used in calculating the revised debt figures.
Ogaji said:
“We want the government to publish how they arrived at their figures and what components formed them. The last time all parties had a reconciliation meeting was in March 2025. So it is important to confirm when another reconciliation was done.”
According to Ogaji, the debts claimed by GenCos are grounded in contractual agreements and include several components often overlooked.
These include unpaid invoices dating back to 2015, capacity and deemed capacity payments, foreign exchange adjustments, and costs linked to frequent power plant start-ups and shutdowns.
Additional liabilities, she said, cover interest charges based on NIBOR plus 4%, VAT on gas supplied between 2013 and 2021, and losses resulting from low plant utilisation due to gas shortages and transmission limitations.
Source: UGC
The disagreement comes as the Federal Government continues efforts to reform the electricity market and resolve longstanding financial issues affecting the sector.
Achieving consensus will be crucial for restoring investor confidence and ensuring the long-term stability of Nigeria’s power sector.
Despite reform initiatives, the industry continues to face significant hurdles, including legacy debts, tariff gaps, and operational inefficiencies—factors that have constrained investment and contributed to unreliable electricity supply nationwide.
FG raises N501bn bonds to clear electricity debt
Meanwhile, Legit.ng earlier reported that the federal government raised N501 billion through bonds to address historic debts in the electricity sector.
The bond issuance aims to restore confidence and unlock investments in the troubled power market.
The settlement programme could improve electricity service delivery for over 12 million customers.
Source: Legit.ng
