ABUJA, May 5 (AGCNewsNet) – President Bola Tinubu is expected to hold an emergency meeting with Nigeria’s power generation companies (Gencos) as the federal government races to resolve a ballooning ₦4 trillion debt that now threatens the country’s already fragile electricity supply chain.

The planned high-level dialogue follows a crisis meeting on Tuesday between the Minister of Power, Adebayo Adelabu, and top Gencos executives in Abuja. According to a statement released Sunday by the Ministry of Power, the engagement was sparked by growing fears of a national grid collapse due to persistent liquidity shortfalls.

“The situation is a national emergency,” Adelabu said, adding that President Tinubu is committed to avoiding a total breakdown of the sector. He confirmed that the government plans to immediately offset a significant portion of the debt in cash while the rest will be paid off over the next six months using promissory notes.

According to the Gencos, the ₦4tn debt comprises ₦2tn owed for electricity generated and supplied in 2024 and ₦1.9tn in legacy arrears. The companies warn that the mounting burden has severely hampered their ability to fund maintenance, pay for gas, and upgrade infrastructure—factors that could push the entire power value chain to the brink of collapse.

“This debt overhang has practically crippled our operations,” said Col. Sani Bello (retd), Chairman of Mainstream Energy Solutions and head of the Association of Power Generating Companies (APGC). “Without urgent government intervention, the entire power ecosystem could fail.”

Kola Adesina, Chairman of Egbin Power and First Independent Power Limited, echoed similar fears: “This is a national emergency. Everything—our hospitals, homes, and industries—depends on reliable electricity. We can’t afford to let the sector fail.”

While no exact date has been fixed for the presidential meeting, the Ministry of Power confirmed that discussions with the Gencos were ongoing. Minister Adelabu stressed that the Tinubu administration is also exploring regulatory and structural reforms to stabilize the power sector beyond short-term financial relief.

He noted that inconsistent policies and systemic failures have deepened the crisis and called for a fully liberalised electricity market with cost-reflective tariffs. “Citizens must pay the appropriate price for the energy they consume,” Adelabu said, noting that blanket subsidies are no longer viable. “However, targeted subsidies will be maintained for the most vulnerable Nigerians.”

Dr. Joy Ogaji, CEO of the APGC, listed additional hurdles confronting the Gencos, including erratic gas supply, foreign exchange volatility, and multiple taxation. She warned that the naira’s steep depreciation—from ₦157/$1 in 2013 to ₦1,600/$1 in 2025—has undermined maintenance budgets and increased debt servicing costs.

“Despite numerous challenges, Gencos have continued to operate under severe strain,” Ogaji said. “But the risks are becoming unsustainable.”

Adelabu said the government would work with Gencos to raise public awareness about efficient electricity use and the importance of transitioning to a more sustainable, market-driven power system.

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Source: The Punch