The Federal government has pledged to pay ₦2 trillion to power generation companies (GenCos) as part of efforts to address a growing debt crisis in the electricity sector.
The move comes after GenCos, under the Association of Power Generation Companies (APGC), warned they may shut down operations due to unpaid debts now exceeding ₦4 trillion. The companies expressed frustration over what they described as inadequate payments for electricity already supplied to the national grid.
Speaking at the 2025 Ministerial Briefing in Abuja on Thursday, Nigeria’s Minister of Power, Adebayo Adelabu, confirmed the government would settle part of the debt using a mix of cash and promissory notes.
“These debts are largely unpaid subsidies. About half are inherited liabilities, and the other half accrued from 2024 operations,” Adelabu explained. “We plan to pay down close to ₦2 trillion before the end of this year.”
According to the minister, promissory notes will allow GenCos to secure loans from banks to keep operations running while waiting for full payment. “The promissory notes will be liquid enough for them to take to banks for discounting if they need immediate cash,” he said.
The announcement follows growing concerns over the financial health of Nigeria’s power sector, which has been plagued by liquidity challenges for years.
In a related development, Adelabu said the federal government’s debt to the Abuja Electricity Distribution Company (AEDC) has been reduced by nearly half—from ₦15.53 billion to ₦8.17 billion—due to reconciliatory efforts.
He also revealed that Nigeria reached a new milestone in electricity generation earlier this year. “On March 2, 2025, Nigeria achieved an available generation capacity of 6,003 megawatts—the highest in our history,” Adelabu announced, while noting that the figure is still far below what the country needs.
The minister thanked operators and agencies for their roles in reaching the milestone, but acknowledged there is still a long way to go in reforming the power sector.