The Minister of Power, Chief Adebayo Adelabu, has revealed that the Federal Government is set to settle up to N2 trillion out of the staggering N4 trillion owed to electricity generation companies (Gencos) before the end of 2025. This move, he said, is a deliberate effort to prevent a potential shutdown of power plants across the country due to the severe liquidity challenges currently facing the power sector.
Chief Adelabu made the disclosure on Thursday in Abuja while addressing the media during the sixth edition of the 2025 Ministerial Press Briefing Series. He noted that the proposed payment will be made through a combination of direct cash disbursements and promissory notes, as part of a broader strategy to gradually defray the mounting debts and stabilise the power sector.
According to the minister, the debt owed to the Gencos is largely a result of unpaid electricity subsidies, with approximately half of the liability being legacy debt inherited by the current administration, while the remaining balance accrued during the 2024 fiscal year.
“These debts are essentially unpaid subsidies due to power generation companies. Almost 50 per cent of the N4 trillion was inherited, while the other half came from electricity operations in 2024. I am aware of recent reports in the media where the Gencos issued warnings, threatening to shut down their plants over this unresolved debt burden,” Adelabu stated.
He disclosed that consultations have already commenced with the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, to work out modalities for the debt settlement. Adelabu confirmed that the Federal Government plans to issue guaranteed debt instruments, including promissory notes, which the Gencos can present to financial institutions for discounting to access immediate funding.
“These promissory notes will be credible and bankable instruments. The companies can approach banks for discounting if they require urgent liquidity injections. Alongside this, we are making budgetary provisions to also facilitate cash payments. The commitment is to pay about N2 trillion out of the total N4 trillion before the year runs out,” the minister explained.
This development follows a recent statement issued by the Association of Power Generation Companies (APGC), where the Gencos expressed serious concerns over the crippling financial strain caused by inadequate and delayed payments for electricity already supplied to the national grid. The association warned that the sustained lack of payment could force many of them to halt operations, further plunging the nation into darkness.
In response to these fears, Chief Adelabu reassured stakeholders of the government’s determination to address the financial challenges bedeviling the sector. He emphasised that while the debts could not be paid off all at once, the payment structure being proposed would provide much-needed relief to the power firms and help avert operational shutdowns.
The minister also reiterated the administration’s broader commitment to reforming the power sector, stabilising electricity tariffs, and ensuring sustainable energy supply, despite the subsidy burden and rising operational costs.
