The Presidency said it has begun processes to pay ₦2 trillion from a total ₦4 trillion legacy debts owed for electricity generated and supplied to the national grid.
A representative of the Special Adviser to the President on Energy, Olu Verheijen, revealed this at a Nigerian Electricity Supply Industry (NESI) stakeholders meeting organised by the Nigerian Electricity Regulatory Commission (NERC).
According to her, the debts to be settled before the end of the coming quarter are part of efforts to stabilise Nigeria’s power sector.
While emphasising the significance of paying off the debts for the power sector, she explained that alternative debt instruments were being explored, given the Federal Government’s fiscal constraints.
She confirmed that both the Coordinating Minister of the Economy, Wale Edun, and the Debt Management Office (DMO) have expressed their support, adding that internal approvals are currently underway.
“We’re empathetic to what GenCos are facing,” Verheijen said through her representative, Eriye Onagoruwa, adding that while timelines could not yet be confirmed, significant groundwork had been laid.
“I hope by the next NESI meeting, I’ll be able to share a clear update,” she said.
The move followed a warning from the Gencos to FG over the continued accumulation of debts now totalling over ₦4tn.
The GenCos said the debt, which includes ₦2 trillion for 2024 and ₦1.9 trillion in legacy debts, was threatening the continued operation of their power generation plants.
In February, the Minister of Power, Adebayo Adelabu, said the Nigerian government owed electricity generation companies (GenCos) and distribution companies (DisCos) in the country over N4 trillion in debt.
Adelabu added that the debt burden was crippling the sector, making it challenging for GenCos to perform optimally.
In a development, however, Adelabu in April promised to resolve all issues surrounding the debts.
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