The federal government of Nigeria has initiated internal approval processes to resolve the N2tn legacy debt owed to electricity generation companies (GenCos), aiming to stabilise the country’s struggling power sector by the end of the next quarter.
This was disclosed at the second Nigerian Electricity Supply Industry (NESI) Stakeholders Meeting of 2025 by a representative of the Special Adviser to the President on Energy, Eriye Onagoruwa. She stated that the government is aware of the urgent need to address the growing debt burden, which has hampered GenCos’ operations and disrupted electricity supply nationwide.
Due to current fiscal constraints, Onagoruwa revealed that the government is considering alternative debt instruments. “We are empathetic to what GenCos are facing. Internal approvals are underway, and we are working with both the Coordinating Minister of the Economy and the Debt Management Office,” she said.
Though she refrained from providing a precise timeline, Onagoruwa expressed hope that a definitive update would be shared at the next NESI meeting, suggesting developments could be announced within the next three months.
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The intervention comes amid growing concerns, as the Federal Government’s debt to GenCos now exceeds N4tn, with about N200bn in tariff shortfalls accumulating monthly. The Senate Committee on Power recently disclosed that no payments had been made to power producers this year, pushing the 2025 debt alone to N800bn.
The NESI meeting gathered key players across the electricity value chain to address sector challenges and outline reforms. Discussions covered issues such as the widening metering gap, the Presidential Metering Initiative, and the proposed Meter Asset Fund. Stakeholders also reviewed the establishment of the Nigerian Independent System Operator (NISO) and the impact of state-level regulatory bodies introduced under the Electricity Act 2023.
Stakeholders expressed optimism that resolving the GenCo debt and implementing broader reforms would reposition Nigeria’s electricity sector for sustainable growth.
