Presidency Moves To Clear #2 Trillion Legacy Debt Owed To GenCos In Power Sector Overhaul.
The Nigerian Presidency has taken a significant step towards stabilising the nation’s beleaguered power sector, with internal approvals underway to resolve a #2 trillion legacy debt owed to electricity generation companies (GenCos). The announcement came from Eriye Onagoruwa, representing Olu Verheijen, Special Adviser to the President on Energy, during the second Nigerian Electricity Supply Industry (NESI) Stakeholders Meeting of 2025, hosted by the Nigerian Electricity Regulatory Commission (NERC) in Abuja on Monday, 2 June 2025.
Speaking to stakeholders, Ms Onagoruwa acknowledged the severe strain the debt has placed on GenCos, hampering their operations and contributing to Nigeria’s unreliable electricity supply. “We are empathetic to what GenCos are facing,” she stated, emphasising the urgency of addressing the long-standing financial burden. She revealed that the Presidency is actively exploring alternative debt instruments to settle the #2 trillion legacy debt, a move aligned with efforts by the Coordinating Minister of the Economy and the Debt Management Office.
Although a firm timeline for resolution remains unconfirmed, Ms Onagoruwa expressed optimism, noting that significant groundwork has been laid. “I hope by the next NESI meeting, I will be able to share a clear update,” she added, hinting at potential progress within the coming months. The legacy debt forms part of a larger #4 trillion liability, which includes #2 trillion accrued in 2024 and #1.9 trillion in historical arrears, as highlighted by GenCos in April 2025.
The mounting debt has raised alarms across the sector, with power generation companies warning of potential shutdowns that could cripple the national grid. The Senate Committee on Power recently underscored the liquidity crisis, noting that government tariff shortfalls result in approximately #200 billion in unpaid obligations to GenCos each month. This initiative by the Presidency follows earlier commitments from Power Minister Adebayo Adelabu, who in April pledged to address the crisis and revive the sector’s financial health.
Stakeholders at the NESI meeting welcomed the development, expressing hope that the resolution, combined with ongoing reforms, will bolster Nigeria’s electricity supply industry. Discussions also covered critical issues such as the widening metering gap, the Presidential Metering Initiative, and the transition to a multi-tier electricity market, all aimed at ensuring long-term sustainability.
With internal approvals in motion and alternative financial instruments under consideration, the Presidency’s efforts signal a renewed commitment to tackling one of the power sector’s most pressing challenges. Nigerians now await further updates, hopeful that these steps will pave the way for a more reliable and robust electricity supply.
