N4.7tn Debt: FG Still Hasn’t Met Gencos Despite Previous Commitments

Despite the Ministry of Power’s assurance that President Bola Tinubu would soon meet with power generation companies to address the N4.7tn debt owed to them, there has been no communication with the GenCos nearly two months later.

Last month, the Federal Government announced plans to pay N2tn of the N4.7tn debt before the end of the next quarter, according to the Special Adviser to the President on Energy, Olu Verheijen.

However, despite these promises, the GenCos have stated that the Federal Government has yet to contact them for any discussions regarding payment or arrangements to meet the President.

The Minister of Power, Adebayo Adelabu, through his media aide, Bolaji Tunji, said efforts are still ongoing to organise a meeting between the generation companies and President Tinubu.

Speaking with The press on the matter, the Chief Executive Officer of the Association of Power Generation Companies, Joy Ogaji, confirmed that the association had yet to hear from the Federal Government.

According to her, neither had a date been fixed for the meeting, nor had the Federal Government contacted the GenCos for further discussions. Asked if the Federal Government had reached out to the GenCos on the meeting with Tinubu, Ogaji replied, “Not yet. We are still waiting.”

Earlier, Ogaji had urged Tinubu to hasten the plan of meeting with the firms over the N4.7tn power sector debt to the GenCos. She expressed cautious optimism over the promise that the government would pay the debt.

The PUNCH recalls that following a high-level meeting between the Minister of Power, Adebayo Adelabu, and chairmen of GenCos, in Abuja amid mounting fears of a possible collapse of the national grid due to liquidity constraints in the sector, the government announced that Tinubu would meet with the generation companies.

At the meeting held in May, the power minister pledged immediate action to reduce the N4.7tn debt owed to the GenCos.

A statement by the power minister’s media aide, Tunji, on May 5, stated that the Federal Government had resolved to settle a substantial portion of the debt immediately, while the remainder would be cleared through financial instruments such as promissory notes within the next six months.

Tunji said the payment plan would be proposed in a meeting being planned between Tinubu and the Gencos’ leadership. However, it was learnt that nothing had been paid to the GenCos as of the time of filing this report.

Ogaji, who was also at the meeting with the power minister in May, told our correspondent that the meeting ought to be held “as soon as possible.” She had earlier said that the requests of the GenCos have been chronicled in a letter submitted to the Federal Government.

The executive secretary highlighted the challenges facing the power generation companies, including erratic gas supply, persistent defaults on payments, and foreign exchange volatility.

Speaking at the meeting, she noted that the dramatic depreciation of the naira—from N157 to $1 in 2013 to N1,600 to $1 now—severely affected maintenance budgets and loan repayments. “Gencos have borne unsustainable risks—from grid failures to unproductive taxes—while remaining patriotic,” she said.

The Power Ministry stated that once a date is set for the meeting with the President, the GenCos will be informed. The power minister’s aide, Bolaji Tunji, told a correspondent in a brief interview that arrangements for the planned meeting are underway.

“Once a time is fixed, it will be communicated to them. The minister is working on it,” Tunji said.

Earlier, generation companies had issued a warning to the Federal Government over the continued accumulation of debts, which now total over N4.7tn. They revealed they are currently owed N2tn for power supplied in 2024 and N1.9tn in legacy debts.

In response, Minister Adelabu emphasized the need to pay a substantial portion of the debt in cash. “At the minimum, let us pay a substantial amount, then ask for debt instruments in promissory notes to cover the rest,” he stated.

Meanwhile, the power sector is reportedly on the brink of crisis, facing liquidity challenges and difficulties in paying gas companies.

Stakeholders have expressed concern that some power generation companies might be forced to shut down unless the Federal Government urgently intervenes to clear debts owed to GenCos.

With the N4.7tn debt, generation companies are struggling to operate their power plants effectively. Gas-fired thermal plants are particularly affected, as their owners are unable to pay gas suppliers for the feedstock necessary to keep operations running.

Transcorp Power previously revealed that it is owed approximately N650bn for the power it has generated, highlighting that the lack of liquidity has hindered its expansion plans. It was also gathered that each month, over N200bn is added to the total debt owed to the GenCos.

According to a document reviewed by a correspondent, the total invoiced amount from January to December 2024 was N2.7tn, of which only N762.1bn has been paid, leaving an outstanding balance of N1.94tn. This means the GenCos have recovered just 28.18 percent of their total dues for the first eleven months of 2024.

Industry operators have expressed concern that without urgent intervention, many power plants may be forced to shut down or face gas supply cutoffs to prevent further debt accumulation. Questions have also been raised about how the Federal Government intends to clear the debt given the sector’s budget allocation of N900bn.