Power Minister, Adebayo Adelabu, says President Bola Tinubu will hold talks with the chief executives of power generation firms (GenCos) a staggering debt of N4 trillion.
The minister’s Special Adviser on Strategic Communications and Media Relations, Bolaji Tunji, disclosed this in a statement issued in Abuja, advised Nigerians to brace for higher electricity costs after in the event subsidy is withdrawn from the energy sector.
The minister said the federal government intends to pay off a substantial part of the debt, while the remaining amount will be cleared through financial mechanisms like promissory notes within a period of six months.
He explained that the upcoming discussion with Mr. Tinubu is geared towards finding a practical solution to the escalating debt, which has critically impacted the nation’s electricity framework.
He indicated that without prompt action, the sector may face a significant failure.
“We understand the urgency surrounding this issue. The government is dedicated to addressing this debt in order to stabilize the industry and avert potential crises,” stated Mr. Adelabu.
Recognizing the government’s own part in the difficulties faced by the sector, Mr. Adelabu committed to not just solving the debt issues but also to enacting structural changes that will eliminate operational hurdles.
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He stressed the importance of fully liberalizing the power industry and advocated for the implementation of tariffs that accurately reflect costs.
“Consumers need to pay fair rates for the energy they utilize.
“The federal government will persist in offering specific subsidies to aid economically challenged Nigerians, yet we must understand that our economy cannot bear widespread subsidies permanently,” he stated.
The minister also announced intentions to reassess current regulations to reduce charges and bolster market stability.
He encouraged power generation companies to collaborate with the government in promoting awareness about efficient electricity consumption and tariff truths.
The power companies were represented by Col. Sani Bello (rtd), the chair of Mainstream Energy Solutions, who also serves as the chair of the Association of Power Generating Companies.
Mr. Bello cautioned that ongoing cash flow issues had left the power generation companies incapable of meeting their loan obligations or maintaining essential infrastructure.
“Unless immediate action is taken, the entire energy framework risks failure,” he remarked.
Kola Adesina, the chairman of Egbin Power and First Independent Power Limited, referred to the current conditions as a matter of national concern.
He emphasized that a dependable energy supply is crucial for the survival of businesses, residences, and healthcare facilities.
Joy Ogaji, the chief executive officer of the Association of Power Generation Companies, pointed out the systemic issues that are hindering GenCos, such as persistent payment delays, inconsistent gas availability, and foreign exchange fluctuations.
She expressed her concerns about the dramatic fall of the naira from N157/$1 in 2013 to N1,600/$1 in 2024, stating that it has severely impacted GenCos’ capacity to fulfill maintenance requirements and service debts.
“GenCos have endured unbearable risks from grid failures to ineffective taxes while remaining committed,” she stated.
