Nigeria’s power sector stands on the precipice of collapse, burdened by a staggering N4 trillion debt owed to power generation companies (Gencos). This alarming revelation came from Power Minister Adebayo Adelabu during a high-stakes meeting between President Bola Tinubu and representatives of the Gencos. The debt, a legacy liability accumulating since 2015, threatens to unravel the sector’s recent progress and stifle the broader economy. Without immediate liquidity support, warned Adelabu, the sector faces imminent generation shutdowns, potentially crippling the nation’s economic activities and negating the hard-won gains of the Tinubu administration. While President Tinubu has requested time to verify the Gencos’ debt claims, Adelabu has made a compelling case for partial debt repayment to maintain operations while the audit process unfolds. The Minister underscored that the administration’s reforms have already paved the way for a self-sustaining power market, and interim financial relief would prevent a catastrophic system collapse.
Adelabu commended President Tinubu’s decisive intervention in addressing the long-standing debt crisis, praising the administration’s commitment to resolving the liquidity challenges plaguing the sector. The Minister highlighted significant strides made in the power sector since May 2023, attributing the advancements to the President’s leadership in restoring investor confidence and driving tangible improvements across the electricity value chain. Tinubu’s personal involvement in the meeting, Adelabu emphasized, demonstrates his unwavering commitment to ensuring the stability and sustainability of the power sector. He pointed to remarkable milestones achieved in less than two years, accomplishments once considered unattainable.
These achievements include the landmark Electricity Act of 2023, the first legislation signed by President Tinubu, which has decentralized and liberalized the electricity market, promoting competition and private sector participation. The administration also introduced the first Integrated National Electricity Policy in 24 years, providing a cohesive framework for sector planning and execution. Remarkably, over $2 billion in new capital has been attracted for grid expansion and off-grid electrification projects. The sector’s annual revenue has surged by 70%, increasing from N1 trillion in 2023 to N1.7 trillion in 2024, consequently reducing government subsidy obligations by N700 billion. Installed generation capacity has also risen from 13,000MW to 14,000MW, achieving a peak generation of 5,801MW and eliminating national grid collapses in 2025. Furthermore, the Presidential Metering Initiative has delivered over 300,000 smart meters, with an additional 3.45 million currently in procurement.
Despite these positive strides, Adelabu cautioned that the substantial N4 trillion debt owed to Gencos jeopardizes all progress. Echoing the concerns of industry leaders like Tony Elumelu and Kola Adesina, he underscored the urgent need to address gas supply shortages, particularly in the Afam axis, where unpaid gas suppliers have hampered power generation. Likening liquidity to the lifeblood of the power sector, Adelabu proposed immediate solutions, including unlocking 800 million cubic feet of gas through the Nigeria Liquefied Natural Gas (NLNG) company to stabilize generation while long-term reforms take effect.
Adelabu endorsed President Tinubu’s call for patience from Gencos and financial institutions while the government finalizes its verification process. Acknowledging the frustrations of investors, he emphasized the importance of ensuring that every claimed liability is legitimate and verifiable. While the administration will not inherit debts without thorough scrutiny, it remains steadfast in its commitment to resolving them transparently. Adelabu lauded the N4 trillion bond program, which has received anticipatory approval from the President, as a viable solution and urged all stakeholders to collaborate on finalizing the terms, ensuring that only valid debts are securitized.
Reiterating the crucial role of electricity as the cornerstone of Nigeria’s industrial and economic ambitions, Adelabu urged collective perseverance to sustain the sector’s revitalization. He expressed confidence that with continued presidential support, the sector would overcome its legacy challenges and ultimately deliver stable and affordable power to every Nigerian. The high-level meeting, attended by key government officials including Chief of Staff Femi Gbajabiamila, Coordinating Minister of the Economy and Finance Wale Edun, Minister of Information Mohammed Idris, Special Adviser on Energy Olu Verheijen, and APGC Chairmen Col. Sani Bello (rtd), along with industry leaders Tony Elumelu and Kola Adesina, underscored the seriousness of the situation and the government’s commitment to finding a sustainable solution. The future of Nigeria’s power sector, and indeed its economic prosperity, hinges on the successful resolution of this critical debt crisis.
