From Adetutu Folashade-Koyi and Isaac Anumihe, Abuja
Following threats by the generation companies (GenCos) to declare force majeure on their operations if the N4 trillion owed them was not paid, the federal government, on Thursday, promised to defray the debt by half before the end of the year.
Speaking at the 2025 Ministerial Press Briefing in Abuja, Minister of Power, Adebayo Adelabu, said while the government may not offset the total debt, it would pay at least N2 trillion and urged the GenCos to sheath their sword.
Explaining the mode of payment, Adelabu said that the government will pay in cash and promissory notes. The promissory notes, he noted, can be taken to banks for discounting.
“There are plans under way to make these payments. While I will not say it will be paid 100 per cent, we will be paying this debt gradually.
“And the mode of payment is in two ways. We have some budgetary provisions, which will facilitate cash payments. We are also discussing with the generation companies to give them some guaranteed debt instruments, like the promissory notes.
“These promissory notes will be liquid enough to be taken to the banks for discounting if they need immediate cash injection. So, it is a combination of cash payments and promissory notes. And I can tell you that between now and the end of the year, we are going to pay close to N2 trillion out of this fortune.
“These debts are unpaid subsidies of the federal government, which are due to the generation companies. Almost half of it was inherited, while about half of it came from 2024 operations. And I agree with you, there was a publication in the paper where the companies threatened to shut down their plants,” he said.
According to the minister, the debt has been a matter of serious concern to the government, and he has discussed the issue with the Minister of Finance and the Coordinating Minister for the Economy, and the government has concluded that payments will be made once there’s a budget release.
“It was a hard discussion with the Minister of Finance and the Coordinating Minister for the Economy, who has promised that they are working on the promissory notes. And once we have budget releases, cash payments will also be made,” he promised.
He also noted that part of the debt was inherited from past administrations, adding that the Bola Ahmed Tinubu administration has agreed to offset all the debts.
Also, Adelabu admitted that the power sector is facing serious challenges, which include the N4 trillion debt, vandalism of power infrastructure, and lack of investment in the sector.
Earlier, Minister of Information and National Orientation, Alhaji Mohammed Idris, had explained the reason for the ministerial briefing, saying that it is to project the achievements of President Bola Ahmed Tinubu’s administration.
He said that the Minister of Power is the seventh in the series.
“For President Bola Ahmed Tinubu, electricity is pivotal to the administration’s major goal of industrialising Nigeria for jobs, skills, exports and prosperity,” he further explained.
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