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President Bola Tinubu has approved the payment of ₦2.8 trillion to power generation companies (GenCos) as the Federal Government’s verified liability for accumulated electricity subsidies dating back to 2010.
The decision follows months of negotiations and a tripartite audit involving the Ministry of Finance, NBET, and the GenCos.
Tinubu rejected the operators’ ₦6 trillion claim, insisting he would not pay beyond the audited figure.
“The GenCos came here last August… They said legacy debt since 2010 is up to ₦6tn. Now, the President told them, ‘That is your claim… but I’m not going to pay ₦6tn just because you said so. We are going to audit,’” a Presidency source explained.
In January, the government raised ₦501bn through a bond under the Presidential Power Sector Debt Reduction Programme, which was disbursed as a goodwill gesture while the audit was ongoing. With the audit now concluded, the verified liability stands at ₦2.8tn.
Tinubu has attached conditions to the disbursement, directing that a significant portion be used to settle GenCos’ debts to gas suppliers, a key factor in recurring grid collapses.
“Government is going to mandate them on the amount… so they don’t come back and say you are still owing gas suppliers,” a source said.
Additional payments of ₦600bn–₦800bn are expected between May and July, bringing total disbursements to about half of the approved liability by mid-year, with the balance spread over 12–24 months.
The Presidency’s audit also identified underinvestment by operators, noting that GenCos and DisCos often collect revenue without reinvesting in infrastructure.
Tinubu has therefore tied part of the ₦2.8tn payment to mandatory infrastructure renewal, with evidence of compliance required.
The Nigeria Labour Congress has opposed large-scale payments, describing privatisation as “a grand deception,” while warning against rewarding companies that bought assets for ₦400bn but failed to significantly improve generation capacity, which still fluctuates between 2,000 and 5,000 megawatts.
SOURCE: The PUNCH
