FG to explore alternative debt facility to offset ₦2tn power sector legacy debt
— DMO, Minister of Economy lead strategy amid fiscal constraints
Oredola Adeola
The Federal Government, citing fiscal constraints, has announced plans to explore alternative debt instruments to offset the approximately ₦2 trillion legacy debt owed to power generation companies.
The government is working with the Coordinating Minister of the Economy and the Debt Management Office to clear the debt.
Ms. Olu Arowolo Verheijen, Special Adviser to President Bola Ahmed Tinubu on Energy, confirmed this on Monday, during the 2nd NESI Stakeholders Meeting of 2025, organised for key players in the Nigerian Electricity Supply Industry to address critical sector issues.
Verheijen, who was represented by Eriye Onagoruwa, stated that the circa ₦2 trillion legacy debt.
Advisors Reports gathered that the broader pool of unpaid obligations in the power sector predates 2023, includes debts owed to both GenCos and other market participants, such as gas suppliers and service providers.
Meanwhile, the Verheijen explained that alternative debt instruments are being explored, given the Federal Government’s fiscal constraints, and confirmed that both the Coordinating Minister of the Economy and the Debt Management Office have expressed their support.
She further stated that the internal approvals are currently underway.
The S.A to President Tinubu said, “We’re empathetic to what GenCos are facing,” she said, adding that while timelines can’t yet be confirmed, significant groundwork has been laid.
She however assured that she will be able to share a clear update during the next NESI meeting.
Recall that Colonel Sani Bello (retd), Chairman of the APGC Board of Trustees, had in a statement credit to him in April revealed that the financial strain due to the legacy debt is threatening the sustainability of their operations and, by extension, the stability of the national power supply.
The GenCos called on the government to urgently address these debts to prevent potential nationwide blackouts and further deterioration of the power sector.
They emphasized that without immediate financial intervention, the continued operation of their power generation plants is at serious risk.