ABUJA, Nigeria (VOICE OF NAIJA)-The Presidency has initiated internal approval processes aimed at resolving the N2 trillion legacy debt owed to electricity generation companies (GenCos) before the end of the next quarter, as part of broader efforts to stabilise Nigeria’s power sector.
This was disclosed on Monday by a representative of the Special Adviser to the President on Energy, Eriye Onagoruwa, during the second Nigerian Electricity Supply Industry (NESI) Stakeholders Meeting of 2025, organised by the Nigerian Electricity Regulatory Commission (NERC).
Onagoruwa noted that the Presidency recognises the critical need to address the mounting debt burden, which has placed significant strain on GenCos and disrupted electricity supply across the country.
She added that given current fiscal constraints, the government is considering alternative mechanisms to settle the obligations.
“We are empathetic to what GenCos are facing,” she said. “We are exploring alternative debt instruments, and I can confirm that both the Coordinating Minister of the Economy and the Debt Management Office are aligned with this effort. Internal approvals are currently underway.”
Although no firm timeline was given, Onagoruwa expressed optimism that a concrete update would be provided at the next quarterly NESI Stakeholders Meeting.
“I hope by the next NESI meeting, I will be able to share a clear update,” she stated.
The issue of GenCo debt has become increasingly urgent, with outstanding obligations now reportedly exceeding N4 trillion.
In recent weeks, electricity generators have raised alarms about the impact of these arrears on operations and supply reliability.
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The Senate Committee on Power has also flagged the sector’s deepening liquidity crisis, noting that tariff shortfalls suggest the government owes an estimated N200 billion monthly to GenCos.
The Federal Government has yet to make any payments to electricity generation companies (GenCos) since the beginning of the year, pushing the outstanding debt to approximately N800 billion, a Senate committee has revealed.
This disclosure came during the second Nigerian Electricity Supply Industry (NESI) Stakeholders Meeting of 2025, which convened regulators, operators, and industry leaders to tackle persistent bottlenecks and drive forward critical sector reforms.
Key issues discussed included the widening metering gap, progress on the Presidential Metering Initiative, the proposed Meter Asset Fund, and the operationalisation of the Nigerian Independent System Operator (NISO).
Stakeholders also examined the shift toward a multi-tier electricity market and the evolving role of newly established State Electricity Regulatory Commissions under the Electricity Act 2023.
Speaking at the forum, Acting Managing Director of the Nigerian Bulk Electricity Trading Plc (NBET), John Akinnawo, warned of potential market fragmentation stemming from ongoing decentralisation efforts.
READ ALSO: Tinubu Orders Settlement Of GenCos, Gas Debts
He called on NISO to lead in harmonising policies and ensuring system-wide coordination.
In response, NISO Managing Director Abdu Mohammed Bello delivered a detailed presentation outlining the agency’s vision, mission, and strategic mandate.
He emphasised NISO’s critical role in promoting transparency, enhancing system coordination, and supporting market stability.
Participants at the meeting welcomed the Presidency’s move to address the mounting GenCo debt, voicing optimism that the ongoing reform agenda, combined with financial interventions, would help reposition Nigeria’s electricity sector for long-term sustainability.
With sector-wide reforms underway and a commitment to resolving legacy debts, attention now shifts to the Presidency’s next steps in delivering on its promises before the next quarter.