… Minister mulls electricity subsidy removal, urges Nigerians to embrace cost-reflective tariffs
Oredola Adeola
President Bola Ahmed Tinubu is set to address the N4 trillion debt owed to the Generating Companies of Nigeria (GenCos), with payment of the outstanding balance to be completed within six months through financial instruments such as promissory notes.
This was disclosed by Chief Adebayo Adelabu, Minister of Power, in a statement released by Bolaji Tunji, his Media Relations Officer, on the sidelines of high stakes talks with the Chairmen of Generating Companies of Nigeria (GenCos) in Abuja on Tuesday.
According to Adelabu, the urgent need to address the N4 trillion debt crippling Nigeria’s power generation sector is borne out of the need to avert an imminent collapse of the country’s power infrastructure.
The Minister, in the statement, assured that the immediate payment of a significant amount from the N4 trillion debt would be proposed in a planned meeting between President Tinubu and the GenCos’ leadership.
“There is a need to pay a substantial amount of the debt in cash. At the minimum, let us pay a substantial amount, then ask for a debt instrument in promissory notes to pay the rest,” he said.
Adelabu confirmed that President Tinubu would meet with the GenCos’ leadership to fast-track the process.
He said, “We recognize the urgency of this matter. The government is committed to resolving this debt to stabilize the sector and prevent further crisis.”
Col. Sani Bello, Chairman of Mainstream Energy Solutions and also the Chairman of the Association of Power Generating Companies (APGC), in his response, warned that liquidity challenges had left GenCos unable to secure loans or maintain infrastructure.
Recall that the APGC Chairman had earlier sounded the alarm over the sector’s dire state, citing the N4 trillion debt as a critical threat to operations.
“Without urgent intervention, the entire power ecosystem could collapse,” he stressed.
Kola Adesina, Chairman of Egbin Power and First Independent Power Limited, echoed the urgent need to clear the debt. According to him, “This is a national emergency. Everything hinges on power—industries, homes, hospitals. We cannot afford to let the sector fail.”
Dr. Joy Ogaji, CEO of APGC Power, detailed systemic challenges undermining GenCos, including chronic payment defaults, erratic gas supply, and foreign exchange volatility. She noted that the Naira’s plunge from ₦157/$1 in 2013 to ₦1,600/$1 had devastated maintenance budgets and loan repayments.
“GenCos have borne unsustainable risks—from grid failures to unproductive taxes—while remaining patriotic,” she said.
Speaking further, Chief Adelabu acknowledged the government’s role in the sector’s struggles, pledging to not only clear the debt but also implement reforms to ease operational bottlenecks.
He emphasized the need for full liberalization of the power sector, urging Nigerians to embrace cost-reflective tariffs.
“Citizens must pay the appropriate price for the energy consumed. The Federal Government will continue to provide targeted subsidy for economically disadvantaged Nigerians.
“We have to understand that our economy cannot sustain subsidies indefinitely,” he asserted, calling for public sensitization campaigns to drive compliance.
The Minister also outlined plans to transition the sector toward sustainability, including regulatory reviews to reduce levies and enhance market stability.
He urged GenCos to collaborate on advocacy efforts to educate Nigerians on efficient electricity use and tariff realities.
