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The Minister of Power, Adebayo Adelabu, has warned that Nigeria’s power sector could face imminent collapse if urgent liquidity support is not provided to offset the N4tn debt owed to power generation companies.
Speaking during the recent meeting between President Bola Tinubu and members of the Association of Power Generation Companies at the Presidential Villa, Adelabu said the debt overhang, a legacy liability dating back to 2015, poses a grave threat to the sector’s progress and the broader economy.
A statement by the minister’s spokesman, Bolaji Tunji, on Monday, said Adelabu warned that the sector’s “progress risks being derailed by a N4tn debt overhang owed to Gencos—a legacy liability accumulated since 2015.”
He also stressed that “without urgent liquidity support, the sector faces the real risk of generation shutdowns, which would cripple the economy and undo the hard-earned gains” of the Tinubu administration.
Though the President pleaded for time to verify Gencos’ N4tn debt claims, Adelabu appealed for partial debt defrayment to sustain operations while audit processes conclude, emphasising that the Tinubu administration’s reforms have already laid the groundwork for a self-sufficient power market.
Adelabu commended Tinubu for his decisive intervention in addressing the longstanding debt crisis affecting Nigeria’s power generation companies. He lauded the administration’s commitment to resolving the liquidity challenges stifling the sector’s growth.
Adelabu highlighted the strides made in the power sector since May 2023, crediting the president’s “visionary leadership for restoring investor confidence and driving tangible improvements“ across the electricity value chain.
He emphasised that the president’s presence at the meeting underscored his unwavering dedication to the stability and sustainability of Nigeria’s power sector, noting that in less than two years, the administration had achieved critical milestones that were once deemed impossible.
The minister listed key achievements under the Tinubu administration, which include the enactment of the Electricity Act (2023), the first legislation signed by Tinubu, which decentralised and liberalised Nigeria’s electricity market to foster competition and private-sector participation.
“The administration also launched the first Integrated National Electricity Policy in 24 years, providing a coherent framework for sector planning and execution. Over $2bn in new capital has been attracted for grid expansion and off-grid electrification projects, while annual sector revenue rose by 70 per cent, from N1tn in 2023 to N1.7tn in 2024, reducing government subsidy obligations by N700bn.
“Installed generation capacity has grown from 13,000MW to 14,000MW, with an all-time peak generation of 5,801MW and zero national grid collapses in 2025. Additionally, over 300,000 smart meters have been delivered under the N700bn Presidential Metering Initiative, with 3.45 million more in procurement,” the statement stated.
While celebrating these achievements, Adelabu warned that the progress risks being derailed by the N4tn debt owed to the Gencos if no urgent action is taken to defray the debt.
Echoing concerns raised by industry leaders, Tony Elumelu and Kola Adesina, Adelabu emphasised the need to address gas supply shortfalls, particularly in the Afam axis, where unpaid gas suppliers have constrained generation.
He described liquidity as the oxygen of the sector and proposed immediate solutions, such as unlocking 800 million cubic feet of gas through NLNG, to stabilise generation while long-term reforms take root.
Adelabu endorsed the President’s appeal for Gencos and financial institutions to exercise patience as the government completes its verification process. He acknowledged the frustrations of investors but stressed the need to ensure that every liability claimed is valid and verifiable.
While the administration will not inherit debts without due scrutiny, it remains committed to resolving them transparently. Adelabu praised the N4tn bond programme, granted anticipatory approval by the President, as a viable solution and urged stakeholders to collaborate on finalising the terms to ensure only legitimate debts are securitised.
Adelabu reiterated that electricity remains the cornerstone of Nigeria’s industrial and economic ambitions, urging collective perseverance to sustain the sector’s revival. He expressed confidence that with the President’s continued support, the sector would overcome its legacy challenges and deliver stable, affordable power to every Nigerian.
The meeting was attended by the Chief of Staff to the President, Femi Gbajabiamila; the Coordinating Minister of the Economy and Finance, Wale Edun; the Minister of Information, Mohammed Idris; the Special Adviser on Energy, Olu Verheijen; APGC Chairmen, Col. Sani Bello (rtd); and industry leaders like Tony Elumelu and Kola Adesina.
