Amid fears of an impending collapse of Nigeria’s power sector, the Federal Government has pledged urgent intervention to offset the N4 trillion owed the electricity generation companies (GenCos), a move it says is critical to stabilising the sector and ensuring uninterrupted power supply. President Bola Tinubu is expected to meet with the leadership of Nigeria’s GenCos as part of an emergency effort to address the N4 trillion debt threatening to cripple the country’s electricity supply chain.  

  Despite the unreliability and instability of the national grid, the number of electricity consumers placed on Band A by the Federal Government has soared by 162 per cent, rising from 481 feeders about one year ago to 1,261 by the end of April.  

  The move follows a high-level meeting last Tuesday between the Minister of Power, Adebayo Adelabu, and chairmen of GenCos in Abuja, amid liquidity constraints in the sector.

  This assurance came at the Abuja meeting with the GenCos led by Chairman of Mainstream Energy Solutions and head of the Association of Power Generating Companies (APGC), Col Sani Bello (rtd).   He said this would be proposed in a meeting being planned between Tinubu and GenCos’ leadership.

  “There is a need to pay a substantial amount of the debt in cash. At the minimum, let us pay a substantial amount, then ask for debt instruments in promissory notes to pay the rest,” Adelabu said. “We recognise the urgency of this matter. The government is committed to resolving this debt to stabilise the sector and prevent further crisis.” 

  Bello, speaking on behalf of the GenCos, described the debt overhang as a major threat to Nigeria’s energy stability, noting that many GenCos were unable to service loans, carry out routine maintenance, or invest in capacity expansion. “Without urgent intervention, the entire power ecosystem could collapse,” he warned.  

  Kola Adesina, Chairman of Egbin Power and First Independent Power Limited, echoed this sentiment, describing the situation as a national emergency. “Everything hinges on power, industries, homes, hospitals. We cannot afford to let the sector fail,” he said.

   This latest vow by the Federal Government comes against the backdrop of earlier reports detailing the deteriorating financial health of GenCos and the wider electricity supply industry. It has been consistently highlighted how payment defaults by the Nigerian Bulk Electricity Trading Company (NBET), gas supply constraints, ageing infrastructure, and inconsistent tariff regimes have pushed operators to the brink.

  Chief Executive Officer of the APGC Power, Dr Joy Ogaji, reinforced these concerns, citing systemic challenges such as erratic gas supply, currency volatility and delayed payments from market operators. She lamented the impact of the naira’s sharp depreciation from N157/$1 in 2013 to over N1,600/$1 presently on GenCos’ maintenance budgets and debt servicing obligations.

  Adelabu, while acknowledging the government’s past missteps, reiterated his ministry’s commitment to comprehensive reform, including full market liberalisation and a gradual shift to cost-reflective tariffs. He said the Federal Government would continue to offer targeted subsidies to protect low-income households but maintained that Nigerians must begin to pay appropriate rates for electricity consumed.

  Yesterday, sources from the Ministry and presidency told The Guardian that although Minister of Power met with electricity generation companies on Tuesday last week, the meeting deadlocked as the players insisted on meeting the President. 

  A letter dated April 29, 2025, addressed to Tinubu and signed by the Board Chairman of Mainstream Energy as well as APGC, Sani Bello; business tycoon and owner of Transcorp Power, Tony Elumelu; billionaire owner of Geregu Power, Femi Otedola; and that of Egbin Power, Kola Adesina, warned the President of possible national security challenges that might result from a failure to attend to them urgently. 

   The Guardian gathered that the investors were not pacified with the appeals of the minister, as they noted that the Tinubu government had no financing plan for the debt. They insisted that a paltry budgetary provision made by the government only leaves very little room to believe government promises through the minister.

  They had also questioned the reverse auction’s fairness, the notes’ security, interest absence, holding period, repayment certainty, legal enforceability, and outcomes if the programme or auction fails. Additional concerns include the auction’s size, participation by non-GenCos, and note transferability.

  Over the weekend, Nigerian Electricity Regulation (NERC) sources told The Guardian that major concerns of the market has been the inability of the Federal Government to meet subsidy payments as promised at the inception of this administration. 

  While the government is currently raising about N1 trillion in favour of metering domicile with the Ministry of Power, same energy has not been extended to the liquidity issues in the sector.

  In November last year, the Federal Government received a $500 million credit from the World Bank for metering and DisCos’ capacity. The Federal Government has also allocated a total of N700 billion to the Presidential Metering Initiative (PMI), which is funded partly from the Federal Account Allocation and another N59.3 billion under the National Mass Metering Programme.