GenCos Refute FG Deal Over N4trn Debt
Power generation companies have said that discussions with the Federal Government on the N4tn power sector legacy debt are still ongoing.
This is despite the Federal Government’s claims that the implementation framework for the N4tn debt reduction had been finalised with the GenCos.
The Chief Executive Officer of the Association of Power Generation Companies, Dr Joy Ogaji, confirmed that the operators met with top government officials to discuss modalities for settling the outstanding debts but stressed that no concrete agreement had been reached.
In a statement last week, the Special Adviser to President Bola Tinubu on Energy, Olu Verheijen, disclosed that the Federal Government had taken a major step toward restoring financial stability and investor confidence in the electricity market with the finalisation of the implementation framework for the Presidential Power Sector Debt Reduction Plan.
She described it as a landmark initiative approved by Tinubu to address structural bottlenecks and lay the groundwork for large-scale private sector-led investment and sustained economic growth.
But Ogaji said there was nothing finalised yet with the Federal Government as far as the N4tn debt was concerned.
“Yes, the chairmen were invited to discuss modalities. I know that discussions are still ongoing. Nothing finalised or concretised. I can’t confirm it,” Ogaji told The PUNCH when asked to confirm if the payment plan had been finalised.
The Minister of Power, Adebayo Adelabu, had earlier announced that the Federal Government has approved a N4tn bond for the defrayment of the legacy debt.
But the GenCos said they were not carried along by the Federal Government or the Nigerian Bulk Electricity Trading Company.
Ogaji had in September written a letter to NBET seeking clarity and wondering why GenCos were not carried along during the verification process.
In the statement, Tinubu’s energy adviser said that on October 7, she, alongside the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, and the Minister of Power, Adelabu, met with senior executives of Nigeria’s electricity generation companies to review settlement modalities for the outstanding debt.
The meeting, it was learnt, concluded with a consensus on the way forward, which includes conducting bilateral negotiations to finalise full and final settlement agreements that balance fiscal realities with the financial constraints of the GenCos.
Reportedly approved by Tinubu and endorsed by the Federal Executive Council in August 2025, Verheijen said the plan authorised the issuance of up to N4tn in government-backed bonds to settle verified arrears owed to generation companies and gas suppliers.
The intervention was said to be the largest in over a decade, addressing a legacy debt overhang that has constrained investment, weakened utility balance sheets, and hindered reliable power delivery across the country.
At the meeting, the Chairman of Heirs Holdings and Transcorp Power was quoted as saying, “For the first time in years, we are seeing a credible and systematic effort by the government to tackle the root liquidity challenges in the power sector. We commend President Tinubu and his economic team for this bold and transformative step.”
The Group Chief Executive Officer of Transcorp Plc, Owen Omogiafo, disclosed in April that the Federal Government owed the company up to N650bn for the power generated.
The Group Managing Director of Sahara Group reportedly echoed a similar sentiment, saying, “This initiative is significant in every respect. It gives us renewed confidence in the reform process and a clear signal that the government is serious about building a sustainable power sector.”
Verheijen had said that the focus of the government was on creating the right conditions for investment, from modernising the grid and improving distribution to scaling embedded generation.
According to her, by closing metering gaps, aligning tariffs with efficient costs, improving subsidy targeting to support the poor and vulnerable, and restoring regulatory trust, the nation was shifting from crisis response to sustained delivery and building the confidence needed to attract large-scale private capital.
Edun noted that the reforms were beyond liquidity: “They are about rebuilding the fundamentals so that Nigeria’s power sector works for investors, for citizens, and for the next generation.”
It was learnt that the Presidential Power Sector Debt Reduction Plan is being jointly implemented by the Federal Ministry of Finance, the Federal Ministry of Power, and the Office of the Special Adviser to the President on Energy, in collaboration with the Nigerian Bulk Electricity Trading Plc and other key stakeholders.
Despite these assurances, GenCos remain cautious, insisting that the implementation details are still under discussion. Operators said they were waiting for concrete timelines and clarity on verification procedures before confirming any agreement.
Ogaji had earlier stressed that despite the patriotic commitment of operators to keep the lights on, factors outside their control make it nearly impossible to sustain generation. She listed gas supply, maintenance of machines, procurement of spare parts, and obligations to other creditors as key challenges.
“Gas suppliers have already started reducing supply. There are critical maintenance works on our machines, spares to purchase, and other creditors who are no longer willing to wait for payments. They now prioritise those who pay them promptly,” she stated.
The APGC boss revealed that GenCos’ monthly invoices average N270bn, but only about N70bn is paid, leaving N200bn outstanding every month. She faulted the 2025 federal budget, which earmarked N900bn for the power sector without cash backing, calling it grossly inadequate.
SOURCE: The PUNCH